1951-11-27

Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I now have some further information to give to the house on the question of relief to the stricken people of the Po valley in Italy. This will supplement what I said to the house yesterday afternoon.
Perhaps hon. members will have noticed in the news this morning that the Canadian Red Cross Society in addition to supplies from a stockpile in Geneva is contributing $15,000 worth of supplies from Canada. These supplies are taking the form of blankets, woollen underwear, shoes, powdered milk and medicines. The society has approached the government with the request that we facilitate the transport of this material to Europe.
I am glad to inform the house that the government has today placed at the disposal of the Canadian Red Cross Society two North Star aircraft. These aircraft will deliver the material to some airport in Europe which has not yet been designated. Through arrangements made by the Secretary of State for External Affairs (Mr. Pearson) and the Minister of National Defence (Mr. Claxton), both of whom are in Rome attending the meeting of the North Atlantic council, the supreme headquarters allied powers in Europe have undertaken to deliver the material from whatever airport is selected to the actual scene of the disaster.
I know that the house will be unanimous in its appreciation of the expeditious manner in which the Canadian Red Cross is contributing to the relief of the very considerable suffering which, from all reports, is being endured by the people who have been made homeless in the Po valley area. I am sure also that the house will fully approve the decision to help the Red Cross in getting these supplies to the scene of the tragedy by the quickest possible means.


Mr. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, I feel sure that the Prime Minister has correctly interpreted the sentiments of the house, and that all hon.
members will welcome the steps that are being taken. We ourselves had occasion to have some understanding of what it means to see positive evidence of sympathy and support at the time of the floods in this country last year. Above and beyond the importance of the articles	themselves-and	they are
extremely important, particularly in a country like Italy where they have not the supplies available that we have-I feel sure that this gesture will give these people heart at a time when they must be suffering in spirit as well as physically.



CAPITAL COST ALLOWANCES


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, I desire to place on the table two copies of order in council P.C. 6384, dated November 27, 1951, amending the regulations with respect to deferred capital cost allowances.
The change in the regulations is designed to provide further relief in cases where a genuine commitment has been made before April 11, 1951. Hon. members will recall that on June 28, 1951, I advised this house that partial relief was being granted with respect to properties in existence on April 10, 1951, and acquired by bequest or inheritance, properties transferred between taxpayers who were not dealing at arm's length, and properties taken over when the whole of a business was acquired in a deal at arm's length.
Order in council P.C. 6384 goes further and grants relief in respect of properties in existence, under construction, or under contract, as of April 10, 1951, provided the taxpayer can establish that he had entered into a genuine commitment which he was obligated to abide by.
Briefly, the amendment in order in council P.C. 6384 authorizes the Minister of Trade and Commerce to grant a certificate of eligibility in three types of cases for property acquired after April 10, 1951, for which a commitment had been made before that date.
First, in the case of new structures, properties are eligible provided the taxpayer can prove that he had entered into a contract with a contractor for the construction of a structure before April 11, 1951, according to plans and specifications adopted before that

Capital Cost Allowances date, and provided that the structure is completed before April 1, 1953. This covers, therefore, the case of a project already under construction on April 10, 1951, and the case where no construction has commenced but a legally binding contract exists between a taxpayer and a contractor, and provided there is available a set of plans and specifications adopted before April 11, 1951, by the taxpayer and forming a part or the full basis of the construction contract entered into between the taxpayer and the contractor.
The certificate will be granted after the property is acquired. One of the tests of a genuine contract in existence on April 10, 1951, will be the fact that the work on the structure will be undertaken and completed within a reasonable time. A period of two years has been considered as a reasonable time in the light of present and foreseeable supply conditions. This explains the provision requiring completion of construction before April 1, 1953. Therefore a taxpayer who has a valid contract as of April 10, 1951, but who has decided to postpone construction for say two years, would not be eligible for a certificate, since the purpose of the amendment is to provide relief to those who not only have a contract but who have also either commenced construction before April 11, 1951, or were obliged to do so, within a short time after that date.
Some new structures are erected by owner builders, that is, without employing a contractor, and in such cases there would be no contract in existence as of April 10, 1951. The amendment to the regulations also grants relief in such cases, provided the taxpayer can prove that construction was commenced prior to April 11, 1951, and completed before April 1,	1953, according to plans and
specifications adopted by the applicant prior to April 11, 1951.
The second group of properties covers structures completed before April 11, 1951. In such cases a certificate of eligibility will be granted if the taxpayer can prove that he was obligated to acquire a property under the terms of a contract entered into prior to April 11, 1951. The emphasis is on "obligated to acquire". Therefore an option which gave a potential purchaser a right to acquire property without obligating him to acquire it would not be accepted as a binding contract under the regulations.
The third group covers mainly machinery and equipment, both new and old. In such cases certificates of eligibility will be granted if the applicant can prove that he was obligated to acquire the items involved under the terms of a contract entered into prior to April 11, 1951. There is no date set as
[Mr. Howe.l

to time delivery has to take place, because it has been presented to us that in some cases of complicated pieces of equipment which are made to order and according to specifications set out by the purchaser, the period required to complete the equipment might involve several years. As with regard to structures, a certificate will be issued only after the property has been acquired by the taxpayer.
These amendments will take care of the bulk of genuine commitments made as of April 10, 1951. Thus in the case of a new project where a construction contract had been let and some of the machinery and equipment had been ordered, this part of the project would be eligible for a certificate provided the various conditions as set out in order in council P.C. 6384 were fulfilled. Not eligible would be the machinery and equipment ordered after April 10, 1951, or any substantial changes in or additions to the structure beyond what had been provided in the plans and specifications drawn up and adopted by the taxpayer before April 11, 1951. As I remarked to this house on June 28, we may not be able to take care of everything for which a taxpayer could make a case for relief, but we have gone a long way to grant relief where the taxpayer had no option but to carry out commitments made before April 11, 1951.
I should like to emphasize that the relief granted under the order in council tabled today applies to industries not otherwise qualified for a certificate of eligibility.
Just before closing, hon, members may be interested in a brief statement about the progress of administering deferred capital cost allowance provisions.
Between April 11, 1951, and November 16, 1951, 928 applications for certificates of eligibility have been received. Of these, 342 have been approved, involving capital expenditures of $269-9 million. Projects approved include properties acquired by defence and defence-supporting industries, under subsection 5 of section 1107 of the income tax regulations, properties acquired by basic industries required for the carrying out of their business as provided for under subsection 6, and properties acquired by bequest or inheritance, properties transferred between taxpayers who were not dealing at arm's length, and properties taken over when the whole of a business was acquired in a deal at arm's length, as provided for under subsection 8.
Certificates have been denied for 175 applications, involving $27-7 million. The remaining 411 applications are pending, and these

include many applications which will probably qualify for the issuance of a certificate under the amended regulations announced today.
Of course the impact of the provisions is not fully reflected in the figures I have given, for two reasons. First, there will be many cases where the taxpayer has not applied for a certificate of eligibility because his project clearly does not comply with the exceptions that can be granted under the regulations. Secondly, there are many cases where businessmen have decided to postpone capital projects and they would therefore have no cause to apply for a certificate.
A list of the cases for which certificates of eligibility have been issued has been published in the Canada Gazette of July 21, 1951, and September 22, 1951, .covering all applications approved from April 11, 1951, up to and including September 15, 1951. The names of applicants to whom certificates have been issued since September 15 up to the present will be published shortly in the Canada Gazette.


Mr. J. M. Macdonnell (Greenwood):: May I
ask the minister a question? Notwithstanding the statement the minister has made showing *a large percentage of permits that have been granted, does the minister think that the deterrent which was continued in the act of last April has been a very effective one and is effective still?


Clarence Decatur Howe: My own opinion is that it has been a very effective deterrent. The amount of new private construction has been materially reduced since this provision came into effect.


Mr. H. A. Hosking (Wellington South):: Will the minister tell us whether he has given any consideration to having this four-year period start from the date of April 11, 1951, rather than running for a four-year period from the start of the contract? Many of the larger concerns are speculating whether this will be dropped if conditions change. I wonder whether the minister would be prepared to make a statement regarding the advisability of setting a closing date five years from April 11, 1951, rather than a four-year period from the starting date of the contract?


Clarence Decatur Howe: I would be glad to have the statement of my hon. friend examined as it is reported in Hansard, and, after consulting with my officials, I will make a statement.
Inquiries of the Ministry INDUSTRIAL RELATIONS



CHANGE IN PERSONNEL OF STANDING COMMITTEE

Mr. W. G. Weir (Poriage-Neepawa) moved:: That the name of Mr. Bryce be substituted for that of Mr. Maclnnis on the select standing committee on industrial relations.


[Stage Direction]
Motion agreed to.


Hon. Stuart S. Garson (Minister of Justice) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a measure to amend the Judges Act, 1946, to increase the number of county court judges in British Columbia from fourteen to fifteen.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. L. O. Breithaupt (Waterloo North):: Mr. Speaker, before the orders of the day are called I should like to ask a question of the Minister of Trade and Commerce. My question has to do with proof of age for old age pension applicants, some of whom are having great difficulty in establishing proof of age.
Is the bureau of statistics in a position to assist old age pension applicants to establish their age for the purpose of the act, when other forms of proof of age, such as birth certificates, baptismal certificates and the like, are unavailable? If the bureau is in a position to assist in this connection, would the minister please state the procedure to be adopted by the applicant.


Clarence Decatur Howe: I believe my parliamentary assistant has been looking into the matter, and I would ask him to give the answer.


Mr. G. J. Mcllraith (Parliamentary Assistant to the Minister of Trade and Commerce):: Mr. Speaker, in answer to the question of the hon. member for Waterloo North I would say that under section 15 of the Statistics Act no individual return and no part of an individual return made for the purpose of the Statistics Act can, without the previous consent in writing of the person making the return, be

Inquiries of the Ministry given or published. However, in cases where the person making a census return completes a form authorizing the dominion statistician to furnish information from the census records as to age in the event that other proof of age is not available, the practice is for the bureau of statistics to supply the information in the census records for purposes of verifying the age as submitted to the old age security and old age assistance administrations.
Applicants' for old age security, that is to say those over seventy years of age, who come under the terms of the federal Old Age Security Act, should apply in the usual manner directly to the regional director of old age security in the capital of the province of residence. Those 65 to 69 years of age should apply to the appropriate office in the province of residence charged with the administration of old age assistance.
Hon. members will notice that in no case can information be given except on the request in writing of the applicant. However, forms of request for search for this information as to age are available in the old age security regional offices.


Mr. Gordon Graydon (Peel):: Mr. Speaker, may I ask the Minister of National Health and Welfare whether, when the original forms for universal pensions were being formulated, consideration was given to including an authorization by the applicant to search census records.


Hon. Paul Martin (Minister of National Health and Welfare):: Mr. Speaker, if I understand my hon. friend's question correctly he is asking whether, when we prepared the forms of application, we gave consideration to the further use of census records. My hon. friend will realize I am sure that that could not be done, because the law at that time did not permit our doing so. We have secured legislative authority under the Old Age Security Act.
My hon. friend may be interested, to know that the progress of applications, to date, is such that I may say to the house that, from present indications, we expect to arrive by December 31 at a total of some 685,000, which is not very far from the theoretical total of from 695,000 to 700,000, as we estimated. We have since learned that the population of Canada is 13,900,000 instead of 14,200,000; so that it appears that our original estimate was slightly in excess, and likewise the estimate made by the parliamentary committee. As I said a few days ago, there has been no undue difficulty. Rather, very efficient operation is being experienced in connection with the applications received and the processing in connection therewith.

On the orders of the day:


Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker-


Some hon. Members:: Oh, oh.


Ellen Louks Fairclough: I take it that that is for my persistence. I should like to address a question to the Minister of National Health and Welfare following the answer made by the parliamentary assistant with reference to dominion bureau of statistics records. Which census records, the 1921 or the 1931, will be accepted by the Department of National Health and Welfare? As the residence requirement is twenty years, will the department accept the 1931 records?


Paul Joseph James Martin: May I say to the hon.
gentleman at once-


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: May I say to the hon. gentlemen at once that the reason for the applause when she rose was not her persistence but because of her quite apparent charm. The figure will be 1921 or earlier.



IRRIGATION


[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Roseiown-Biggar):: Mr. Speaker, has a report been received from the commission looking into the South Saskatchewan river scheme? If so, will it be tabled?


Louis Stephen St-Laurent: No report has yet been received, but I can assure the hon. member that just as soon as it is received or available it will be made public.



EDUCATION


[Stage Direction]
On the orders of the day:
Mr. R. R. Knight (Saskatoon):: Mr. Speaker, I should like to ask the Prime Minister a question, arising from an answer tabled yesterday. Will he state the reasons for delay in the arrangements to pay authorized grants to universities; and may we hope that those grants may come soon?


Louis Stephen St-Laurent: I hope, as does the hon. member, that they can be made soon. The reason it has not yet been done is that we are still in correspondence with the premiers of the

Canadian provinces to carry out the recommendation of the royal commission that this grant be apportioned after consultation with the provincial governments, in view of their jurisdiction over educational matters. That correspondence has been in process for several weeks, and I hope we are nearing the point where a preliminary distribution may be made.
I may say we have been considering making a grant that would be perhaps approximately 40 per cent or 50 per cent of what might be expected to be paid, even before we get a final determination as to the exact figures with respect to each province and each institution. We do appreciate that they are anxious to receive this aid, and to make good use of it, as we know they will.


Mr, George A. Drew (Leader of ihe Opposition):: I should like to ask a supplementary question. As I understand it, those payments are to be made direct to the provincial governments, and not direct to the universities.


Mr. St. Laureni:: No; if the hon. member will look at the item in the estimates he will see that the grant was one of $7,100,000 to authorize grants to the universities and institutions providing university education. I am afraid we would have some pretty scorching comment in the report of the Auditor General if we did anything different from what is provided in the terms of the vote authorized by parliament.


George Alexander Drew: Then do I understand that the payment will be made as a result of direct applications by the universities to the dominion government, or will this be handled through provincial governments?


Mr.   Si. Laureni@: What has been done up to the present time has been to get, as provided by the vote, advice from the Canadian university council, and on that advice a tabulation has been made and has been communicated to each of the provincial governments, with information as to the advice we have received, and with the request to them for their comments as to whether or not it appears to them to be in order.
[Later] :



INQUIRY AS TO REQUEST FOR FEDERAL AID TO GENERAL EDUCATION

[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg Norlh Cenlre):: May I direct a supplementary question to the Prime Minister? Has the government received from the Winnipeg school board, and perhaps from others, a request
Inquiries of the Ministry that consideration 'be given to extending federal aid to education generally? Is consideration being given to this question?


Right Hon.  L. S.@: I do not know that any such
representations have been received. While I have the responsibility as the head of the government I would have to ask my colleagues to join with me in refusing to consider such a request.



ROYAL CANADIAN NAVY


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, I should like to ask one of the parliamentary assistants to the Minister of National Defence for a statement concerning the so-called Surgeon Lieutenant Joseph C. Cyr, who served as surgeon with the Royal Canadian Navy in Korean waters, and has now been discharged and deported to the United States under the name Ferdinand Waldo Demara. I should1 like to know particularly whether he is really someone else again, and what qualifications he has as a surgeon.


Mr. R. O. Campney (Parliamentary Assistant lo the Minister of National Defence):: The hon. member was good enough to give me notice of his question a short time ago, but in the intervening time I have not had an opportunity to prepare a statement which might clear up the matter. I shall be glad to take his question as notice.


Gordon Graydon: Consult Dr. McCann.



INQUIRY AS TO TREATMENT OF RETURNING

[Stage Direction]
VETERANS ON TROOPSHIP "j. P. MARTINEZ"
On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: May
I address a question to the parliamentary assistant to the Minister of National Defence. Has the Department of National Defence investigated the charge appearing in the press of yesterday that Canadian veterans of the Korean war returning to Canada on the troopship J. P. Martinez were allowed only two meals a day-very small ones at that-and were also made to paint the ship?


Ralph Osborne Campney: I will take the hon. member's question as notice.

Inquiries of the Ministry
WHEAT	NORTH ATLANTIC TREATY



MARKETING SITUATION AND AVAILABILITY OP CARS

[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: should like to direct a question to the Minister of Trade and Commerce regarding the wheat marketing situation on the prairies and whether consideration will be given to making available to those farmers who have not as yet marketed the six bushel quota that was fixed originally sufficient cars for the transportation of their wheat. Is the minister in a position to give a general statement regarding the marketing situation and the availability of cars?


Clarence Decatur Howe: About a week ago a circular went out from the wheat board to the effect that pressure for deliveries at Fort William had ceased and that henceforth priority would be given to congested points that have not been able to deliver their full quota and particularly to the shipment of damp grain. In other words, damp grain would be given priority over dry grain from such points. At the same time the transport controller ordered the railroads to give special priority to points in the province of Saskatchewan where congestion was apparent. From this time on an attempt will be made to correct all situations of the kind referred to by my hon. friend.
Next Monday and Tuesday I am meeting with the wheat board, the transport controller and the board of grain commissioners in Winnipeg for a two-day session to assess the transportation problem for the rest of the year and to lay plans for improving the situation in the best possible way. I hope that after that a more definite program can be announced.


John George Diefenbaker: I thank the minister for that statement.



POST OFFICE


[Stage Direction]
On the orders of the day:
Mr. J. W. Noseworihy (York South):: Will the Postmaster General tell the house what disposition he has made of the eight points raised by the postal employees at their meeting on June 24, 1951, and which he told the house would have to be taken up by the government before an announcement could be made.


Hon. Edouard Rinfret (Postmaster General):: I gave the employees' association an answer in writing some time ago, which no doubt the hon. member has seen.
[Mr. Campney.l



INFRASTRUCTURE AGREEMENT


[Stage Direction]
On the orders of the day:
George Alexander Drew: I should like to direct a question to the Prime Minister in the absence of the Secretary of State for External Affairs (Mr. Pearson), which he may prefer to treat as a notice. Is the government prepared to table what has been described as the infrastructure agreement which was entered into by the members of the North Atlantic Treaty council in Ottawa in September, or, in the alternative, to furnish details of the total figures of the estimated costs of their joint requirements and the division of that cost among the twelve countries along with the proportion of the expenditures to be borne by each of the twelve nations?


Louis Stephen St-Laurent: I shall have to take that question as a notice. The hon. member will appreciate that I shall have to communicate with the NATO council because it is understood that any information about their decisions has to be authorized by the council. I shall be glad to make available to the house all the information that can be published.



HOUSING


[Stage Direction]
On the orders of the day:
Joseph William Noseworthy: Will the Minister of Resources and Development tell the house whether the lending institutions have accepted the government policy for financing houses for defence workers which he indicated to the house on November 5 was then under discussion with the lending institutions?


Hon. Robert H. Winters (Minister of Resources and Development):: Mr. Speaker, the lending institutions are not joining with the government in arrangements for the building of houses for defence workers, but they have agreed to participate in joint loans which are available on the 80 per cent basis announced to the house some time ago.



FINANCIAL ADMINISTRATION


Hon. Alphonse Fournier (for the Minister of Finance) moved: the second reading of Bill No. 25, to provide for the financial administration of the government of Canada, the audit

Financial Administration
of the public accounts and the financial control of crown corporations.


James MacKerras Macdonnell: Mr. Speaker, I think we will all agree that this measure is of great importance. People are inclined to say that finance is dull, but unless we manage our financial affairs pretty well they may become rather exciting before we go very far. People are becoming more tax conscious and one hears quite fervent statements made from time to time in private, even about so genial a person as the Minister of Finance (Mr. Abbott) who is associated with these high taxes.
Broadly speaking, I think this is a measure which we should consider with the greatest care. It is very hard of course to be as realistic in managing the affairs of the public as in managing the affairs of a private business. In the case of the private business there is an acid test facing you every day. You have to be on the right side in respect of your business operations or you will come to an end. You will become bankrupt. That is not true, of course, in the case of the government. I am fond of a remark attributed to the late Sir Wilfrid Laurier when he was in the opposition. The minister of finance of that day was a man who had been the head of a business, and he and Sir Wilfrid were great personal friends. Sir Wilfrid said to the minister of finance: Mr. So and So, I observe that you are very worried about your position. You are worried about matters which are under your charge. You are worried about the position of the public finances. Of course it is right that you should take your work seriously but do not worry too much. Of course when you were in business you had to worry because if you did not show a profit your business would be liquidated, but a government can stand an awful lot of ruin, and I would not worry too much. If you do too badly we will defeat you and come back into power and take over things again ourselves.
No doubt that was a comforting reflection and it reminds us of the different test which exists. After all, no government is bankrupt, no government can fail to pay its way, as long as there is a taxpayer from whom it can take a single dollar more. As long as the taxpayer has money in his pocket the government can take it away from him. Therefore there is that great difference, and it is hard for us to bring the same measure of scrutiny. It is an odd thing to say-perhaps it is because of the huge amounts with which we now deal- but if one reads the debates of thirty, forty, fifty or more years ago, one finds that they took money matters very seriously. I suppose their own affairs were carried on in a small way. I remember reading a budget debate-
I have forgotten whether it was Mr. Fielding's budget being criticized by Sir George Foster or vice versa, but at any rate the minister of finance, whoever he was, had produced a very small surplus. It was a matter of a few thousand dollars and the financial critic of that day, using language which we really would not dream of using now, denied that there was any surplus. He said if there was it had been produced by fraud and misrepresentation.
I do not know where the libel laws were. Of course they could not affect him in the House of Commons, but they did let themselves go in those days, and perhaps we are becoming too soft. I do not know how that may be, but at any rate they debated for a whole summer afternoon about these few thousand dollars, and as I say they used words to each other which have now passed out of usage in the house altogether except among some of our brighter spirits who are not really encouraged to let themselves go, as I think perhaps they might. However, as I say, today it is hard for us to concern ourselves about small amounts or even about large amounts. We have come to talk in billions. There is a phrase which has been so often quoted that I quote it now with apology. It has now passed into the language and I quote it without even trying to remember who it was who said it. This phrase- "What's a million?"-has of course passed into the language of this house and we must not suggest that it is the peculiar property of anybody. It is in the air, Mr. Speaker, and we must all perhaps plead a bit guilty to it.
At any rate I come now to consider for a moment one aspect which has become so familiar to us, the matter of surpluses. The gentlemen to whom I have referred argued for a whole summer afternoon about a few thousand dollars. Now we have passed into the hundreds of millions, and indeed I suppose we have passed into an age when I can quite imagine that some of the younger people in the finance department can hardly conceive of a world where there would be deficits instead of surpluses. I was told the other day by a man in the retail trade in a large way that the same thing has happened in business too. He said: You know, in our business some of the younger buyers have had quite a lesson lately. They have found out that it does not always happen that you buy things, mark them up and sell them at a nice profit. They have found out that sometimes you buy things, mark them down and sell them at a loss. He said that it had been very good for them to find that out and that they are setting out now to do better buying and to carry on their business in a better way.

Financial Administration Unless the present boom is going to be different from all other booms, which no sensible man hopes or believes, and is going to go on forever-and of course we should remind ourselves it has always been a characteristic of booms that while they were on people thought they were going to last forever-one day we may find that such a thing as a deficit does exist. Therefore we should welcome this measure, the purpose of which is to try to enable us to carry on our own business better.
I do not propose to take the time of the house to go into a lot of details. I understand this measure will be referred to a committee and I merely wish to raise a few points of principle which I think are important and which I hope will be seriously considered by the committee if and when this measure reaches it.
First of all I should like to say a word about the powers being given to the treasury board. I observe that a good deal of detailed powers are being given to the treasury board, and by and large it would seem to me that is very wise. So far as my research, which has been limited, has gone, I would say that a good many of the powers that are being given to the treasury board are going to relieve the governor in council of details and that it is a wise delegation. However, I think there is one thing which should be borne in mind. In handing powers to the treasury board caution should be exercised in superseding the jurisdiction of other public bodies. That no doubt is a difficult problem, and I shall give one illustration of the kind of thing I have in mind. I observe that section 7, subsection (d), paragraph (i), reads as follows:
The treasury board may make regulations (d) notwithstanding the Civil Service Act,
(i) authorizing the payment to persons in the public service of compensation or other rewards for inventions or practical suggestions for improvements.
Then there is a further paragraph which speaks about reimbursement for travelling or other expenses. I am not going to pause on that. There are details there which I think could be gone into, but I am just raising this question. Here is what looks like a somewhat important invasion of the powers of the civil service. It may be wise or unwise, but I venture to sound a note of caution there.
I go on now to comment with respect to section 22, again raising the question of powers, although this is a somewhat different 

power. This is the power of the governor in council. The section reads:
The governor in council, on the recommendation of the treasury board, whenever he considers it in the public interest, may remit any tax, fee or penalty.
Further on it is provided in the same section that when that is done a statement of each remission of $1,000 or more granted under this section shall be reported to the House of Commons in the public accounts. We all know that things reported in the public accounts come many months afterwards and that it is not as effective a means of reporting as we would like. I take this occasion to raise that as something which I think the committee might very well consider.
I come back again to the treasury board and I refer to section 5 under which the treasury board is to assist in budgeting and other things, and I pause to say just a word about budgeting.
I was interested in reading a book entitled "Financing Canadian Government" by A. E. Buck. He has many interesting things to say, and incidentally I ran across a figure he gave as to the extent of the accuracy of budgeting in Great Britain where, according to him, they arrive at an accuracy of something like 2-5 per cent. I am not going to make a comparison with our own, because the circumstances are somewhat different. But frankly when we consider what has been going on it is hard to believe that our budgeting is dealt with as it should be. Sometimes one finds it hard to understand how serious men can go so far wrong. Sometimes one wonders, after several years of being so wrong, that they would have been able to know how great an error to make in order to be right. It reminds me of the old quip in Punch-one of the many criticisms of the London telephone service. A customer calls up central and says, "What wrong number must I call in order to get London Wall 6677?" It ought to be possible for this government, with these gigantic mistakes which are made year after year, to say we are going to be $500 million wrong or $700 million wrong and correct their estimate accordingly.
At any rate, I would have thought it would have been possible, by guess and by God- no, no, by calculation of past errors-to know how great an error to make. I do not want to press that farther, and I do want to recognize that part of the bad budgeting has been due to increased inflation. What has been often said here before, of course, is that increased inflation is partly due to bad budgeting. We know the argument. If you take much more than you need it sends up

prices, which sends up receipts, and you have this spiral going on and on. I repeat what I have said before, that we could stand this better if there was any sign of repentance; but all we have is a continuing sense of selfsatisfaction. Perhaps the greatest irritation of all is that we are expected to accept as a complete answer, "Well, we used the money to pay off the debt." I do not suppose anyone thinks they stole the money. You could not do so even if you tried. It is not that we do not want to pay off the debt. Of course, we want to do that; but we do not want to blunder into it, we want to plan it.
I go on to the next section, which is under public stores. On a cursory reading, which was all I had time to do, it would appear as if we were going to have a kind of superrevolving fund. The other day we had a little experience with revolving funds, and the relations between the various government departments seemed rather casual and loose. It was almost a case of the right hand not knowing what the left hand doeth. In this connection I suggest it would be well for the committee to have a close look at these revolving funds.
I should like to say a word about crown corporations. Here we have a real problem because on the one hand we must give adequate power and adequate discretion to those who are carrying on business like any other corporation-Polymer is an example. On the other hand, we must somehow or other retain adequate control in this parliament. It is a curious irony that most of the crown corporations come under the Minister of Trade and Commerce (Mr. Howe). He is a man of many devices. So far as I can see he apparently manages to be both a private ownership man and a convinced public ownership man at the same time, and without any split personality. But after all, there is perhaps quite a simple explanation of that. The contradiction is only superficial, because when he was describing the operations of Polymer in this house on a certain day, the member for Rosetown-Biggar (Mr. Coldwell), after listening to his very satisfactory report, said to the minister "a pretty good recommendation for public enterprise". The Minister of Trade and Commerce gave an answer which I really think should, in some way or other, be immortalized. He said "This is different. This is my enterprise."
Of course it is natural that under the present Minister of Trade and Commerce these corporations should go on pretty strongly under their own steam. This may raise a question for the future. I often wonder in my own heart whether the Minister of
Financial Administration Trade and Commerce could honestly in his heart advocate that such wide powers as he has had should be given to anyone else. I would think he would have grave doubts about that. However that may be, there they are. They have been very unusual, and I think this may well raise a question in the future.
One other question which arises in connection with crown corporations is the question of the relationship of the Auditor General to their operations. Section 77 says that the Auditor General is "eligible" to be appointed the auditor or a joint auditor of a crown corporation. Actually, he may be eligible; he may have passed the qualifying round, but he has not very often won a prize because he has not been very popular as auditor to crown corporations. I have the names of some, which I am going to mention, for whom he is not the auditor. I am not willing to press this point unduly because there may be certain cases where, by reason of the size of the corporation and the ramifications of its operations, the Auditor General might have to enlarge his staff to do one particular job, and that would throw him out of balance. I am not dogmatizing on this, I am just raising the point. When I find companies like the Industrial Development Bank and the board recently set up under the Agricultural Products Marketing Act are not put under the Auditor General's supervision, I think it is a matter the committee should investigate. I believe the committee should be thoroughly satisfied as to what the policy is, and the reasons for it.
I want to say a word, and I think this will be my last point, about part VI of the act which deals with the whole manner of setting up the public accounts. Looking back, it is not possible to reach any other conclusion than that our method of dealing with our public accounts was like Topsy and just "grow'd". It was not according to a plan but was compromise piled on compromise. I know I am correct in saying that more than once in this house the Minister of Trade and Commerce has remarked about our method of public accounting. I am not quoting now, but I think it is a fair interpretation to say that he expressed the opinion that our method of public accounting is not like that of any private corporation, that we just take nearly everything that comes in and call that income, and we call everything that goes out expenditures. We do not take the trouble to distinguish between what is truly capital and what is truly income.
An ex-minister of finance used a somewhat different phrase when he called it the bridge

Financial Administration score method of accounting with so much below and so much above the line. I do not want anyone to cross-examine me on what that means, because when I play bridge it causes a panic and therefore I do not play. I am merely quoting from an ex-minister of finance.
I just want to say a word about this capital and revenue being tossed in together. In the early days of confederation there was a plausible phrase, "capital expenditure" which got them out of a whole lot of trouble. When there was a depression the finance ministers were inclined to make really quite unwarrantable charges to capital expenditure. Indeed one finance minister is reported to have swollen his revenues and reduced his outlays by judicious use of this phrase "capital expenditure". For example, railway subsidies were for a long time regularly charged to capital account.
We have made improvements since that time, but I am going to add a query in a moment or two because, as I understand it, there is nothing that I can discover in this legislation which really suggests any change in principle as to our method of keeping our accounts. I am somewhat surprised and disappointed that that is so. I am not overlooking the fact that there have been certain changes of technique which I think indicate more clearly what is capital and what is revenue. But nevertheless my understanding and information is that when we say that Canada has a surplus or deficit of so much, that is arrived at by pouring into one pot indiscriminately capital and revenue items of income; and the same is true with respect to the outgo. To me that seems to be an extremely unfortunate situation. It may be that the difficulties of making a change are almost overwhelming but it seems to me, to put it mildly, to be extremely unfortunate.
I also want to indicate that the Auditor General has certain questions to raise about that matter. I wish to read briefly from what he said in 1949 and again in 1950. From 1949 I will read first of all paragraph 1 and next paragraph 3 of his report. Paragraph 1:
In 1947 the public accounts committee recommended that the Consolidated Revenue and Audit Act, 1931. be revised to the end that present day operations are suitably regulated. A needed improvement, for example, is that a statement of assets and liabilities incorporate those of corporate bodies as well as those of the government. The present balance sheet may not be regarded as presenting complete disclosure of the situation.
I read further from section 3 in which he gave more details. After referring to certain improvements he said:
Desirable as are the improvements made, they may not be regarded as more than steps towards

recasting the balance sheet to the end that it portrays, in summarized form, the year-end financial position. To illustrate, the statement does not take notice of assets and liabilities of the custodian of enemy property; nor does it reflect all cash and securities holdings of corporate instrumentalities. For example, the national harbours board held $25,600,000 of securities at the year-end and the Canadian Broadcasting Corporation had over $1,500,000; neither of these totals is included in the schedule of current assets.
I could read further in this section but it is not necessary. That will show the point which the Auditor General makes. I wish to read one short section from his report of 1950. It is paragraph 79:
There is need for statutory definitions of "liabilities" and "assets" for the purpose of (c).
And (c) is as follows:
Such other accounts and matters as are required to show what the liabilities and assets of Canada are at the date of such statement.
To continue:
From the accounting viewpoint, it is inconsistent to ignore, for example, inventories of consumable stores, accounts receivable and moneys held in various corporate and other special accounts, while various non-current loans are treated as assets up to their face value. So far as the liabilities of the government are concerned, the correctness of balances in various liability accounts is not established.
If a statement of that kind were made about the accounts of a private corporation, probably somebody would go to jail for it. But we must not allow ourselves to get excited about that, because we must recognize the different background. Nevertheless, these are important matters brought to our attention by our own special financial guide, philosopher and friend, you might say. I refer to the Auditor General, who represents this house, who is independent of the government and who brings these serious matters to our attention. I hope that these matters will be given by the committee the serious consideration which they deserve.
As I said at the outset, we should not assume that we are going on forever to have surpluses which are easy to come by. We should assume that our affairs need to be managed in the best possible manner at all times. Indeed, we need not look to the future. We can see it this very week. It has often been said-I heard it said in this house yesterday; and when the parliamentary assistant says it, from the point of view that he is making the statement, it is perfectly correct to say it-that our troubles are caused by an excess of money. That statement sounds terribly ironical to all people who do not find that they have any excess of money. Of course the difficulty of it all is that when you have the stream of money growing, it does not fertilize every family

to the same extent. Therefore the inequalities become greater and greater; and therefore the irony of being told that there is too much money is, to the large percentage of the population, a bitter one.
Without enlarging further on that at the moment, I just come back and say that this matter is of great importance. I hope the committee will treat it so; and in particular I hope the committee, the public-so far as one's words can reach them-and those particularly who concern themselves in these matters, will searchingly ask whether the time has not now come when we are going to approach as nearly as possible to the situation which the Minister of Trade and Commerce (Mr. Howe) has often told us we are not in, namely that of having a businesslike balance sheet. We may as well face the fact.
It has been pointed out to us that this act has been on the statute books for a long time. The one that we pass today is likely to stay on the statute books for a long time. For that reason among others I hope that the committee will do a serious job. Incidentally I hope that there will not be any rush. I hope that the committee will not be cut off with sort of short notice before its work can be done. Even if this work had to go over to the next session, it seems to me that it is a matter of sufficient importance to warrant it.


Stanley Howard Knowles: Mr. Speaker, the debate on this measure is not likely to be put into book form and be published as a thrilling best seller. But as the previous speaker has indicated, the measure deals with an important subject. As has been pointed out on previous occasions, it deals with the whole question of the control of governmental finances, and it deals with the question of parliamentary control over the government so far as its financial operations are concerned. When one realizes the scope of the bill, going into that field as it does, he cannot but recognize that it is an exceedingly important measure.
I submit that it has always been a matter of great importance to any democratic country that the finances of the government should be on a proper basis and under strict parliamentary control. I submit further that the need for complete parliamentary control and the need for confidence on the part of the people that financial matters are being handled properly will increase as time goes on. One of the reasons that I believe that need will increase is that, as I see it, the part that governments will play in the financial and economic affairs of our country will continue to increase with the passing of the years.
Financial Administration
There are those in this house who want that to come. Some of us feel that it is a part of the democratic process; that the whole of our financial and economic life is something over which the people should have more and more control in the name of democracy. There are others in this house who do not particularly desire that we move in that direction, but even they admit that we are doing so and the likelihood is that federal budgets will be larger in the years that lie ahead than they are now, and as we contemplate that fact it does make it imperative that we plan our financial administration on the best possible basis.
As a government we are getting more and more into economic fields. We are getting into various branches of production; we are extending our part in the field of social security and we are being called upon as a federal government to concern ourselves with the economic and financial needs of our people in many ways. In fact, if I may say so in passing, despite the off-the-cuff answer that the Prime Minister (Mr. St. Laurent) gave me on the orders of the day this afternoon, I submit that the day will come when the federal government will have to pay more attention to the needs of education generally throughout the country. There is no question but that that could be done without infringing upon the provincial jurisdiction over education, and I submit that the day of federal financial aid to education will come, for come it must.
With such thoughts in mind I emphasize the need for the best possible control over governmental finances. That means that there must be ways and means of achieving economy in a huge set-up such as this. It also means that our statutory provisions for appropriating and expending money, as well as accounting for it, must be very complete. The government of Canada has had many years of experience in this field, and it has had the advice of able men in the Department of Finance and the Auditor General. Thus it is no surprise that there has been placed before parliament at this time a bill that does seem to be an improvement on the legislation that we have had in the past. I welcome the bill, and I am glad too that it is going to be presented to a committee, the committee on public accounts, to deal with. I support the suggestion just made by the hon. member for Greenwood (Mr. Macdonnell) that that committee should not be rushed. Frankly, I do not know when it is going to get time and where it is going to get the necessary staff to do any of this work at this session, in view of the large number of committees now

Financial Administration meeting almost every morning and every afternoon. At any rate, I hope that it will be given sufficient time, whether at this session or at the session that begins in 1952, to do a complete and proper job on this very important measure.
I have already had the opportunity, Mr. Speaker, to say things in connection with this bill on two or three different occasions, and it is not my purpose today to repeat any of the things that I said on those previous occasions, or to go into the matters that I have already discussed. Indeed, the more I look at this bill the more I realize the wide number of subjects that come under its provisions. In passing, however, I would like to say that I certainly pricked up my ears when the hon. member for Greenwood began to refer to section 7 of the bill. The reason I did prick up my ears was that on a previous occasion I had expressed approval of this new section 7, because it makes possible the introduction of a suggestion system into our civil service such as the one that is in operation in the United States. When we were at an earlier stage of this debate I placed upon the record statements and certain tables showing the tremendous monetary savings that have been effected in the United States because of the use of the suggestion system, which has been in effect down there for the last four or five years. I earnestly hope that that system, or one like it, will be put into operation in this country. However, I must say to the hon. member for Greenwood that as he dealt with section 7 I realized that he was not speaking unfavourably of that part of section 7; rather, he was concerned with the latter part which has to do with payment of travelling expenses to civil servants notwithstanding the provisions of the Civil Service Act. The point is that he glossed over section 7, (d), (i), and I hope it is significant that he glossed over it. I hope it means that he supports the type of suggestion that I have been making which, in the United States, has resulted in the saving of many millions of dollars during the past few years.
However, Mr. Speaker, as I said a moment ago, it was not my intention on this occasion to say anything more about aspects of this whole question on which I have spoken at earlier stages. Rather, there is yet another phase of our financial administration about which I should like to say something at this time. It arises, as did some of the other comments that I have made earlier, out of the fact that the Auditor General across the years has made a number of suggestions. I am quite ready to say that the government has


accepted some of these suggestions and has incorporated some of them in the bill now before us.
I would point out, indeed, that one of the suggestions made by the Auditor General, to which I called attention only last week, is implemented in part by a notice of motion in the name of the Secretary of State (Mr. Bradley), which is in Votes and Proceedings for yesterday. It is a notice to the effect that a bill is to be brought in amending the Civil Service Act with respect to the salaries of the civil service commissioners. For many years the salaries of the civil service commissioners have been made up in two parts: part (a) the amount set out in the statute and part (b) an item voted in the estimates year after year. The Auditor General has commented on that several times, and has suggested that vote texts that legislate are not desirable on a long-term basis. I have suggested on several occasions that that proposal of the Auditor General should be implemented by the government. The case of the civil service commissioners is but one example of that type of thing. I am glad to see that that change is being made, and I hope the government will go on implementing that suggestion of the Auditor General; that it will go through the estimates page by page and pick out all the items that are vote texts that legislate and which have been in there year after year and put them on a proper statutory basis, as the Auditor General has suggested.
The particular question that I want to speak about today is one that is a little awkward to deal with because it does concern some of the members of this house, namely, cabinet ministers; but it too has been the subject of comment by the Auditor General in some of his reports, and also in a letter which I have on my desk, which I received from him some time ago in answer to a letter that I wrote him. To describe it in technical language, the Auditor General frowns upon items that have a continuing effect, items in the Appropriation Act of any one year, on the basis of which payments are made in succeeding years as though they were statutory.
I must say that from my study of the matter it seems it cannot be said that such payments are illegal. That seems to be quite clear, but it is also clear-and so the Auditor General says-that it is hardly a desirable practice, and he makes a suggestion as to another way in which this matter could be handled.
The best way to deal with this is to tell the story, and to show how it works out in the case of the allowances paid to cabinet min-

isters for their cars. It so happens that back prior to 1931 instead of cabinet ministers getting the allowances they now get, they were provided with cars and chauffeurs. It appears that in 1931 Mr. Bennett, the then prime minister, as one of the economy measures he was putting into effect, decided that the providing of individual cars and chauffeurs to cabinet ministers should be done away with, and that in its place there should be provision of an annual allowance of $2,000. That was done by an item in the estimates for the year 1931, as set out in item 352 in the Appropriation Act, No. 5, 1931, which is chapter 61 of the statutes of that year.
Perhaps I should put this item on record so that the story will be complete. Item 352 of that year reads as follows:
To provide for payment annually from the consolidated revenue fund of a sum of $2,000 to each minister of the crown charged with the administration of a department, the solicitor general, and the leader of the opposition, and the sum of $1,000 each to the Speaker of the Senate and the Speaker of the House of Commons, in lieu of motor cars and their maintenance, including chauffeurs, the acceptance of such sums not to vacate their respective seats in parliament; and to authorize the governor in council to appoint any person now employed in the public service as a chauffeur of a passenger automobile at Ottawa, whose position is abolished, to a vacant position in the public service, provided such chauffeur has been continuously employed as such for at least two years and that the appointment will be made at no higher remuneration than he is now receiving, $42,000.
What puzzled me, when I first learned about this, was that there has been in the Consolidated Revenue and Audit Act all along, and there has been carried forward into the financial administration act now before us, provisions which seem to me to make it impossible for continuing payments like that to be made.
There is in section 32 of the Consolidated Revenue and Audit Act the following provision:
Balances of appropriations which remain unexpended at the end of a fiscal year shall lapse and be written off . . .
That same provision is being carried forward, although in somewhat expanded wording, as section 35 in the bill now before us.
Then, as section 23 of the Consolidated Revenue and Audit Act, we find this provision:
All estimates of expenditures submitted to parliament shall be for the services coming in course of payment during the fiscal year.
And that same section is being carried forward as section 25 of the present bill. My feeling, as I studied this matter, was that it looks to me as though the estimates for any year must, by virtue of the section I have just read, be for moneys to be spent in that fiscal year, and that fiscal year only. It looks
Financial Administration also from the section I read a moment ago as though any money remaining unexpended by the end of the year must lapse.
On the basis of this I have found it difficult to understand how that appropriation of $42,000 in 1931 could be the basis of continuing payments of $38,000, $40,000 or $44,000 a year, across the years, as has been done. I still cannot understand it. In all fairness I must admit that the Auditor General sees nothing illegal about it, and I understand the Department of Justice has gone into the matter.
The important point is that, in the estimates as we get them each year, motor car allowances to cabinet ministers are included with their salaries. They are not set out separately as items of $10,000 for salary and $2,000 for car allowance, but rather they are included together as $12,000, with the letter "S'' appearing in the margin indicating that these amounts are statutory. There is no question about the $10,000 salary being statutory, because provision for that salary is made in an act of parliament passed in the usual manner. But the so-called statutory basis for the $2,000 is not found in any act stating that every cabinet minister shall receive this $2,000 every year, but rather is found as an item in the estimates for one year, a year long since passed, namely 1931; and the money voted for that year was expended long ago.
That is the way I feel about it, namely that it should not be paid on the basis of an estimate at all, but rather that it should be put into a statute, perhaps the Senate and House of Commons Act, or into the various statutes making provision for departments of government and for the salaries of cabinet ministers.
My contention is that, just as the Secretary of State (Mr. Bradley) has now given notice of a bill to clean up the confusion with respect to the salaries of the civil service commissioners, and just as other matters along that line which the Auditor General has suggested from time to time, are in process of being cleaned up, so the government should come along and clean this up, too. It should not go on year after year putting the letter "S" opposite this sum of money, because it cannot be pointed out to us in any statute that there is such a permanent or statutory provision as that letter "S"' is supposed to indicate.
I know this matter has presented itself to the Prime Minister as a problem, because the last time new departments were created- that was in the fall of 1949-the question came up. On that occasion I asked him some

Financial Administration questions, and his reply was that the problem had presented itself to him and he had been informed that no provision for ministerial car allowances was necessary in the statutes setting up these new departments, because it was paid on the basis of this item in the estimates for 1931.
There was an exchange of views in the fall of 1949, and I made some further remarks on December 10 of that year, as they are set out at pages 3122 and 3123 of Hansard. Then after that I wrote to the Auditor General in the matter, because, as has been pointed out repeatedly, he is the servant of parliament, and each and every one of us has the right to take up with him any matter about which we may be concerned. In turn it is of course his obligation to answer any letters we submit to him.
I drew his attention to this whole question, and to the discussion we had had in the house. Mr. Sellar replied to me in a letter of December 14, 1949, of which I shall read a part:
Dear Mr. Knowles:
Replying to your letter of the 12th, may I say at the outset that perhaps I am not the best person to interpret vote 352 of 1931, because I drafted it.
That was the interesting comment with which Mr. Sellar began his letter. Then he proceeded to say:
I was then assistant deputy minister of finance, and as there was then no deputy minister in office, I was responsible for the routine in connection with the estimates book. The instructions were to prepare a "continuing" item and have the text approved by the then deputy minister of justice.
Apparently that was done, and the wording of that item was in the form I have already quoted from the Appropriation Act, No. 5, 1931. While what follows in this paragraph of the letter does not bear strictly on the point I raised, it indicates the way in which these items in the estimates can be used in a legislative way to provide something that was never intended. Please note that this is a letter from the man who drafted the item in question, and this is what he says:
Frankly I was surprised when, some years later, it was ruled that the latter part of the text provided authority to appoint one of the chauffeurs who, in the interval, had served as the private chauffeur of the then prime minister, Mr. Bennett.
I was in sympathy with the appointment, but had assumed continuity of employment was an implied condition of the text.
The idea of the original item was that all the chauffeurs who were then driving ministers' cars, provided they had been employed for a certain length of time, were to be transferred to some other jobs in the government service. But it turned out that a man who was not so employed at the time,
IMr. Knowles.]

but who later became a chauffeur to Mr. Bennett, at a still later date was given another appointment on the basis of this item. The wording of the item seemed to be clear. The very man who drafted it expresses amazement at the use that was made of it. I mention this because it indicates the importance of careful drafting of items in the estimates and the obligation that rests upon the government not to take advantage of the wording that may be there or of the rulings which the Department of Justice may give. That is the plea I make with reference to this $2,000. I suggest that the government should not take advantage of the rulings that have been given that it is legal. The fact of the matter is that it has never been written into a permanent statute and I think it should be brought out into the open and dealt with. Let me go on and quote further from Mr. Sellar's letter where he says:
On several occasions I have expressed the opinion to the public accounts committee that legislating by the Appropriation Act has undesirable characteristics,

That is the whole point of what I am talking about at this stage, that legislating by means of the appropriation acts has undesirable characteristics.
-and in the report of this office to the House of Commons a year ago I drew attention to the situation. See paras. 39-42 of the attached marked copy.
Mr. Sellar was referring to a copy of the Auditor General's report for 1947-48 which he sent to me with his letter. He goes on to say that more recently he had been informed that he might be called before the Senate and had prepared a memorandum. He sent me some portions of that memorandum which he expected' to present to the Senate. Time has moved on since and he has appeared', not only before the Senate but before the public accounts committee of this house. All that was in that memorandum is now out in the open. Mr. Sellar goes on to say:
I assume from the discussion in the house that you are exploring the matter with the deputy minister of justice, therefore I will not discuss the question from the legal angle.
In other words, I have to say quite frankly, Mr. Sellar does not question the legality of this money being paid out, but he goes on to say, and this is important to us when we are discussing the whole financial set-up of the government and parliamentary control:
My official interest is that of preserving parliamentary control over the public purse.
I am sure that the parliamentary assistant will agree with me that that is the pith and substance of the bill now before us, the

necessity of maintaining parliamentary control over the public purse. Mr. Sellar continues:
For that reason, I entertain the view that much may be said in favour of annual appropriation acts segregating such votes and including a section providing for the expiration of the act on the 30th April.
One must realize that the Auditor General was writing to a private member of the House of Commons which means that he would be guarded and careful in what he said. That makes what he said most significant. In our correspondence the Auditor General and I were discussing the way in which this $2,000 item appears in the estimates. He says that his official interest is that of preserving parliamentary control over the public purse and for that reason he entertains the view that much may be said in favour of annual appropriation acts segregating such votes and including a section providing for the expiration of the act at the end of the fiscal year. If that were done it would mean that this whole business of a continuing item, of legislating for all time by including an item in the estimates of one year, would be done away with. We were discussing the principle of the $2,000. I contend that it was wrong in the first place to arrange for that payment for all time by having an item in the estimates of one year and then thereafter trying to tell us that that is statutory and therefore we cannot discuss it.
The Auditor General dealt with it, not only in his letter to me in the way in which I have quoted, but in his report for 1947-48, a copy of which he sent to me with his letter. In fact paragraphs 39 to 42 of that report constitute a subsection under the heading "legislating by appropriation acts". Paragraph 39 reads:
Since this office was established seventy years ago attention has, from time to time, been drawn to problems associated with legislating by means of token items in annual appropriation acts. For example, the procedure by-passes normal parliamentary safeguards against hasty decision with respect to public expenditure.
That is the whole point I am making.
Further, the practice tends to disturb constitutional usages with respect to money bills-both within the House of Commons and in relationships between the Senate and the house. An ancillary characteristic is that the practice presents difficulties to searchers for the authority for payments.
Even the Prime Minister (Mr. St. Laurent) had difficulty in finding the authority for the $2,000 when bills were brought in two years ago setting up certain new departments. He was advised, but he did not know offhand where that authority was to be found.
Paragraph 40 is under the same heading but it deals with another subject; it relates to
Financial Administration vote 586 in the estimates of that year which had to do with government annuities. The Auditor General pointed out that the effect of vote 586 seemed to be legislative in character rather than the appropriation of one dollar, which happened to be the amount of the item.
Paragraph 41 reads:
Moneys granted by an appropriation act lapse at the year-end-
I have quoted the section in the Consolidated Revenue and Audit Act and I have referred to the section in the bill now before us which makes that provision.
-but the act itself does not expire.
That is the anomaly which underlies the whole problem; the money expires but the act, once having been passed by parliament, is on the statute books for all time.
Consequently, when an item is so worded as to make future expenditures a charge to unappropriated moneys in the consolidated revenue fund,-
That is apparently the way that item 352 in 1931 was worded; it was an item appropriating $42,000 for that year but it was so worded as to make future expenditures a charge to unappropriated moneys in the consolidated revenue fund.
-authority exists to make payments in subsequent years without further grant by parliament.
That may be legal, but I suggest that it is wrong in principle. It violates the precept that there should be parliamentary control over the expenditure of money. Mr. Sellar is really spelling this out most carefully despite the reserve and the guarded language of an Auditor General when he says that the procedure by-passes normal parliamentary safeguards, and when he says in his letter to me that his interest is that of preserving parliamentary control of the public purse. He goes on to say in paragraph 41:
An illustration is the motorcar allowances to ministers, the Speakers and the leader of the official opposition.
In other words, this is not just something the member for Winnipeg North Centre is bringing up; it is there in black and white in the 1947-48 report of the Auditor General.
These payments became statutory charges by the text of vote 352 of Appropriation Act No, 5, c. 61, statutes 1931. The 1947-48 main estimates included thirty items marked " (S) " because of texts in previous appropriation acts-
That is the notation which appears on the left-hand column of the estimate indicating that the item is statutory and we cannot discuss it.
-22 having an association with vote 352 of 1931.
That means that in that year's estimates there were twenty-two of these items related to that motorcar allowance but there must
1366	HOUSE OF
Financial Administration have been! eight others which were marked "statutory" and which had never been dealt with by proper statutes but were simply being paid on the basis of continuing vote that was made in one particular fiscal year. The rest of the paragraph reads as follows:
Among the "to be voted" items in the same estimates were twenty-seven authorizing payments notwithstanding provisions of various public acts.
I come now to the last paragraph of this section to which the Auditor General drew my attention. Paragraph 42 reads:
The practice of legislating by appropriation acts has attractions when dealing with special cases or making temporary exceptions from general legislation; but the thought presents itself that it might be a safeguard and a convenience to members were such items listed together in a special schedule and the reasons therefor printed with each item-as is the practice with respect to bills.
I submit that a careful study of these comments made by the Auditor General in his 1947-48 report, a careful study of his letter to me, practically all of which I have now placed on the record, and a careful study of the whole case I have been making will make it clear that, in addition to the necessity of our having a good bill, which is to be called the Financial Administration Act, it is also important for the government to be most meticulous and careful in the way it words its estimates and in the interpretation that it places upon the estimates after they have been dealt with. As I said before, I pay tribute to the government for the way in which they have from time to time tried to clean up a number of these matters by way of implementing suggestions of the Auditor General. I would be the first to admit they could not do it all at once. I am glad to note the progress that has been made. But I suggest that here is one more case where the Auditor General has suggested something that is very important and is particularly germane to the whole question of maintaining parliamentary control over public expenditure, and I hope that something will be done about it at an early date.


George Alexander Drew: I wish to take a short time to deal with certain aspects of this measure. I appreciate that all sections of the bill will be brought before the public accounts committee. The importance of this legislation is demonstrated by the terms of the definition of the bill itself. It is described as an act to provide for the financial administration of the government of Canada, the audit of the public accounts and the financial control of crown corporations. It is in fact the protection offered to the public that in the handling of moneys taken from the public by taxes


there will be appropriate safeguards and that businesslike methods will be employed in the handling of these funds. As was pointed out at the time the resolution preceding the bill was introduced, this is undoubtedly one of the most important pieces of legislation that can come before parliament. If there are not the safeguards which should exist, then they should be introduced as a result of the examination and discussion which takes place.
If there are any ways in which the public business can be improved through this bill then that should be done. It is for that reason that I wish to refer to something that has already been mentioned in the discussion this afternoon but which I should like to emphasize from another point of view. It is quite clear that, no matter how carefully the estimates may be prepared, certain events are always bound to happen which will produce a different result $t the end of the year from that which was anticipated. There may be international disturbances. There may be internal events such as vagaries of the weather or other circumstances of that kind which would affect the total amount of revenue and also the total amount of expenditure. Nevertheless, subject to such reasonable explanations as may be made, the estimated surplus or the estimated deficit, as the case may be, should bear some reasonable relationship to the estimates which the minister himself has received from his departmental officials, and they should be a correct interpretation to parliament of what the minister himself expects the net result will be, subject to these unexpected events.
It is not open to the minister to put before parliament one estimate of expected surplus and have in his mind some other. If it could be demonstrated that the minister had in fact placed before parliament an estimate which was not the estimate he had in his own mind, then he would of course be guilty of a very grave abuse of his position as a minister of the crown. For that reason surpluses that go far beyond the estimates placed before the house demand some kind of explanation which has not yet been furnished to the house in this current year. When the committee is dealing with this measure I think it might well consider the introduction of some provisions which will clearly state the responsibility of the minister to present to the house a figure which does in fact interpret his own expectations upon the best possible analysis of the figures which have been placed before him.
It has been pointed out that the present surplus is far beyond anything indicated to this house. In fact if the surplus for the present year continues to accumulate at the

rate it has accumulated for the first six months the minister will have guessed wrong by forty times. We are simply told that this after all is good business, that the government will be paying off the public debt. I think that on most occasions it would be agreed that it is a sound thing to pay off debts. What should be remembered by members of parliament, however, is that it is not for the minister to decide whether he will pay off public debts. It is for parliament to decide. If it is the intention of the minister to pay off public debts he should state that to parliament, and parliament, I would imagine, would support him as long as it could be demonstrated that the payment was on a reasonable basis.
If the taxation to be imposed upon the taxpayers of Canada is to include an amount for payment on account of the public debt over and above anything that is actually indicated in the estimates themselves, then the Minister of Finance (Mr. Abbott) is taking it upon himself to do something that he thinks is good but which he has not disclosed to parliament. That is not responsible government. That does not accept the authority of parliament over money, and that is the highest responsibility parliament has. There may be a question as to how much of the public debt should be paid off at any time. There are those who contend, and apparently with some sound arguments to support their contention, that, if too large payments are made at a time like this on account of the public debt, instead of being deflationary it may be highly inflationary. Undoubtedly there would be some point at which that would be true. Surely it would be the responsibility of parliament to be in a position to express some opinion on that subject, if it is the intention of the Minister of Finance to go far beyond anything indicated in the budget he has presented. Here we have a situation where the Minister of Finance has been so grossly and outrageously in error-I say "outrageously" having regard to his responsibility to parliament. He estimated a total surplus of $30 million for the whole year and there is already a surplus in excess of $600 million for six months, more than forty times the amount that had been estimated on a proportionate basis for the whole year.
Let us see what that means. This is not like a surplus in an ordinary business, because every cent of it is overtaxation. It is an amount of money taken out of the taxpayers' pockets which the Minister of Finance was not authorized to take out of their pockets. It is extremely difficult for any individual taxpayer to measure what $600 million means in terms of his own daily experience. But let us see what it does mean.
Financial Administration Accepting fourteen million as the population of Canada at this time, it means that for six months every taxpayer in Canada has been overtaxed to the extent of about $43. Over and above those taxes which the Minister of Finance said he was going to impose, the average taxpayer, every man, woman and child in Canada, is paying $43. I am hardly correct when I use the word "taxpayer", because a child is not a taxpayer, and there are a great many people who pay taxes to a limited extent. Nevertheless, everything which is eaten, everything which is worn, everything which is used includes taxes of some kind, and no Canadian should be under the impression that he is escaping these taxes simply because he does not see a tax marked on the things he buys, or because he may not be called upon to pay income or other direct taxes of that kind.
The way that this can best be appreciated is to take a family of five, which is still the normal family in this country. It means that for the first six months of this year, over and above the taxes disclosed in the budget, the head of a family of five has been overtaxed to the extent of $215. This is not just the amount that has been paid by those in the brackets who pay income tax; it is not just paid by those who pay the visible tax, but that is the average overtaxation for the head of a family of five in this country. I recognize that it may be extremely difficult to introduce into this act a section which will prevent a surplus exceeding in some substantial measure the estimated surplus. This is particularly true when there is a progressive inflation such as we 'have at this time. Nevertheless, even if the act only had a section declaring that the minister accurately interpret the figures which have been placed before him, there should be something declaring beyond any doubt that it is the duty of the Minister of Finance to present to this house the most accurate estimates possible. I believe if that were there we might not see such grossly inaccurate estimates as we have had this year.
There is one other point I wish to mention concerning the bill now before us, and that is the part which deals with crown corporations. This section, which is a new section of the act, defines crown corporations and also sets forth that it is possible for the Auditor General to be the auditor of crown corporations. Section 76 (c), which is one of the defining sections, gives this interesting definition:
"Crown corporation" means a corporation that is ultimately accountable, through a minister, to parliament for the conduct of its affairs, and includes the corporations named in schedule B, schedule C and schedule D.

Financial Administration
I suggest, Mr. Speaker, that that is a slight overstatement. While crown corporations might be ultimately accountable to parliament, they have not been accountable to parliament in a way that has made it possible for parliament to carefully examine the details of the business of those corporations. I do not believe any crown corporation, unless it deals with some secret operation and the statute creating that corporation places it under some terms of secrecy, should be in a position to deny to parliament, through the minister, any and every detail of its operations which affect its business.
We know that on a number of occasions where questions have been asked concerning crown corporations it has been said that this information could not properly be given. There are cases where operations deal with atomic energy in certain of its aspects-I say "in certain of its aspects" advisedly because I do not believe all the activities in relation to atomic energy should be secret. When it becomes an operation which can be used for peaceful purposes, as it is being used now for certain medical activities and where the operation relates to civilian requirements, then I believe the terms of secrecy should be removed. Subject to cases of that kind, and subject to the reservation of secrecy in the act of incorporation of the crown company, I believe that any questions relating to the business, salaries or any other detail concerning the crown corporation, should be available to the members of this house at any time. Otherwise, we can set up a tremendous branch of public business in this country which is not accountable in the ordinary way to members of parliament. I would hope that this part of the act will be reviewed carefully, and that a clearly defined reservation concerning these terms of secrecy may be introduced, so that all the details of the business of a crown corporation set up by the parliament of Canada or under the authority of the parliament of Canada can be brought fully before the members of this house.
Now, I should like to refer back to the overtaxation which has already been seen this year. In explaining to the public accounts committee the way in which the public business of Canada, particularly the financial business of the country, can best be supervised, I suggest that the Minister of Finance (Mr. Abbott) give some explanation of where he and his officials went so wrong this year. That information would be helpful in trying to draft sections which might prevent a repetition of that tremendous mistake.


Mr. James Sinclair (Parliamentary Assistant to the Minister of Finance):: Mr. Speaker-


Mr. Deputy Speaker:: I must inform the house that if the parliamentary assistant to the Minister of Finance speaks now he will close the debate.


James Sinclair: -I intend to make only a few remarks. I think the house is indebted for the comments which have been made by the three speakers on this bill. As all three have pointed out, this is probably the key bill of government, and it is only right that the attention of the house should be drawn to it. I would suggest that not only the members of the public accounts committee who will study this bill item by item but other members of parliament can profitably follow the discussions in that committee and get as good a picture as it is possible to get in this parliament of the function of parliamentary control over expenditures.
I will not comment on the remarks on taxation policy made by the financial critic of the official opposition, the hon. member for Greenwood (Mr. Macdonnell). After all, this bill is not concerned with the methods by which money is raised or with the purposes for which parliament votes that money. It is concerned with the methods by which that money, when raised, is received by the government, held in safekeeping and controlled by the government, and the circumstances under which it is paid out in accordance with either legislation or parliamentary appropriation. It is concerned, of course, with both the internal audit by the office of the comptroller of the treasury, and, perhaps most important of all, as the hon. member for Greenwood and the hon. member for Winnipeg North Centre (Mr. Knowles) have pointed out, the audit by our own servant, the Auditor General, to see that these moneys were spent in accordance with the instructions of parliament.
The first point made by the hon. member for Greenwood was on the transfer of certain powers from the governor in council- that is the cabinet in our ordinary phraseology-to the treasury board. This is certainly a step long overdue, as most hon. members will realize when they look through the record of orders in council. I know that it has been extremely popular for opposition members to call this an order in council government. We have passed tens of thousands of them. But when you actually examine the great bulk of those orders in council it will be found that they are concerned with trivial affairs which, back at the turn of the century when the business
IMr. Drew.]

of the government of Canada was only a fraction of what it is today, may have seemed important but which certainly are not important when compared with other issues which have to be decided by the cabinet today. One which I came across just in the last week or two illustrates, as well as anything can, the type of thing which has now been referred to treasury board rather than to the governor in council for action. Under one of the earlier pension or superannuation schemes here the recipient had the right to either take his pension in instalments or to commute it into a sum. Under the original legislation his decision, if he chose to take it in a sum, had to be confirmed by an order in council. I do not think any of us here today think the cabinet of Canada has so little business that the giving of approval to a man's own decision as to how to take his pension is a matter which should engage their attention. The section referred to by the hon. member will, I think, do a great deal to remove a load of unnecessary trivia from the shoulders of the cabinet.
The hon. member mentioned section 7 (d). I was just thinking of the difference between the opinions expressed on this section by him and by the hon. member for Winnipeg North Centre. But as the hon. member for Winnipeg North Centre stated, I rather think he was referring to section 7 (d) (i) rather than section 7 (d). It gives authority to encourage employees in the public service to advance constructive ideas on how to effect economies. In this regard I think those of us who are actually in the departments carrying out the daily duties of government are perhaps in a good position to see where savings-perhaps just small ones but nevertheless savings which in the aggregate will be substantial-can be effected. As the hon. member for Winnipeg North Centre pointed out in his thoughtful speech on the resolution the other day, such a practice has been useful in the United States.


Stanley Howard Knowles: It is good for morale as
well.


James Sinclair: And it is good for morale
as well, as the hon. member points out.


Gordon Knapman Fraser: It is used in industry.


James Sinclair: It is used in industry, which has found it to be a useful practice. The hon. member at the same time mentioned section 22. Under that section, of course, power to remit taxes or other revenues is not transferred to the treasury board. That is still a matter for decision by the governor in council.
I am sure that the clauses on revolving funds are going to get thorough discussion
Financial Administration when they come before the committee. A year ago we had a protracted debate here on the bill of the Minister of Transport (Mr. Chevrier) establishing the first such a revolving fund. With that discussion under our belts, I think we will be in a better position to understand what is aimed at. I think the principal aim of these provisions for revolving funds is to establish a uniform policy across all departments so that we will understand what is government policy in any department as far as revolving funds are concerned.
The crown corporation section is, I think, undoubtedly the most interesting one and it is also, I think, the section which gave the greatest problems to those who drafted the bill and those senior officials in the various branches of government who were consulted in the drafting. The crown corporations do not fall easily into any one category. This spread which we have between government departments at one end and the companies which are public from the fact that they are owned by the crown but are operated much as a private business corporation, such as Polymer, at the other end, spans the field in crown corporations. Obviously the form of parliamentary control which will be exercised over the crown corporation which is in essence merely an extension of a department of government is entirely different from the control which you would expect to be exercised over what is, in many respects, an independent business operation competing with other privately owned businesses in the same field. That has been the aim of this legislation; and I am sure it will receive careful attention. No doubt when we come before the committee the question of whether or not these various corporations are in their right categories will receive discussion.
The hon. member for Greenwood pointed out this interesting point which I was quite sure some hon. member would raise with respect to section 77, as to the Auditor General's responsibilities in auditing crown corporations. Some years ago as a private member I made a speech on the fact that I thought that the Auditor General should do the work on the C.N.R. I was quite sure that in this debate I would be reminded of that fact. The hon. member for Greenwood came close to it. The actual number of corporations which are not audited today by the Auditor General is small; I think there are four or five all told. The most outstanding of them, of course, are the C.N.R. and the Bank of Canada. The Auditor General entered into all the discussions on

Financial Administration this phase, and when we are before the committee one of the points which will be dealt with is the reasons the C.N.R. and the Bank of Canada are not at the moment included in* those corporations which shall be subject to the audit of the Auditor General. They are audited by outside auditors at the moment.
An interesting point was raised by the hon. member for Greenwood on the form of the public accounts in classifying what are current and capital revenues and what are current and capital expenditures, and then on the balance sheet, in classifying what are assets and what are liabilities, as compared with what in the ordinary business world would be regarded as revenues and disbursements and what would be regarded as liabilities and assets. That point was a subject of long discussion when we had the Auditor General before us in committee on the form of the public accounts. There is a great literature on the difference between the form of accounting which governments must of necessity follow and that which private business can follow. Perhaps it can be summed up best by the words used by the assistant deputy minister at that time, to the effect that a business in listing assets and liabilities can have in mind the thought: If we were to be wound up and sold tonight, what are the liabilities we must meet and what could we realize? What are our assets actually worth? That is not true, of course, with the government. First of all, to think of winding up the government of Canada, the Dominion of Canada, the country of Canada, overnight and putting on the block the assets which have been paid for since confederation -our canal system, for example, our transportation system, our road systems-and saying what a prospective buyer would pay for them is purely hypothetical, since there would be no buyer for such things. The very difficult question of sorting out what is a current expenditure and what is a capital expenditure is one which has engaged governments on all levels in this country for a long time, and it seems to be more or less a decision of the government of the time with respect to any particular borderline expenditure as to which category they put it in.
The hon. member for Winnipeg North Centre (Mr. Knowles) went at some length into the matter of legislation by appropriation, items in the Appropriation Act which have no statute behind them and which might be regarded as money bills in the ordinary sense. As we know, in this house any money bill involving public expenditure has lots of warning. We get a notice of


motion. We get a resolution, and we go into committee on the resolution. Only then do we start the first, second and third readings which are given to all other bills. And of course the fact, as was pointed out by the Auditor General, is that when we legislate through items in the Appropriation Act there are no such stages in the consideration given. It is before you once, and there it is. I think it has already been agreed in this house- certainly I recall the Minister of Finance (Mr. Abbott), when the same member raised this problem a year or two years ago-


Stanley Howard Knowles: Two years ago.


James Sinclair: Yes; and quite recently the Prime Minister (Mr. St. Laurent), at the time of the establishment of those two new departments, agreed that in most instances continuing legislation by appropriation was undesirable. There are fields in which this legislation by appropriation is very practicable. To give examples, there were the Fraser river floods, the Winnipeg floods, the Rimouski and Gabano fires. Obviously we are not going to have bills put through to authorize the payment of non-recurring expenditures-at least we hope they are nonrecurring.


Stanley Howard Knowles: They were emergencies.


James Sinclair: Yes. There were other
instances. I could mention the university grants which were referred to today. In an instance like that there is a need to give help even before a firm policy on legislation has been established; and where in the early stages-that has happened with other forms of legislation-it is necessary to give immediate assistance there is legislation by appropriation. But I think it would certainly be agreed that as these statutes come up for amendment where provision can be made for statutory legislation rather than legislation by appropriation these changes should be made. I am quite sure that the amendments being brought in by the Secretary of State (Mr. Bradley) are along that line.
The point made by the leader of the opposition (Mr. Drew) on the estimates and the extent of the surplus is very interesting. Of course I am not in a position to answer fully. The Minister of Finance will be back early in the week and will be available if desired both for the passage of the bill through the public accounts committee and in the house when the bill is in committee of the whole. I might point out again, though, that in the study which the public accounts committee made of this matter two years ago, when we were studying the form of the estimates, the Auditor General, both from his experience in that post and his previous

Financial Administration
experience as assistant deputy minister of finance, gave us a great deal of information on the difficulties of forecasting both revenues and expenditures in some fields of government. I recall him saying that in a purely administrative department such as the Department of the Secretary of State he would expect accuracy in estimating expenditures to as close a margin as at least 5 per cent. He pointed out of course that in such a department if toward the end of the year you found that you were going to exceed your estimate you have control by cutting back. At the same time he pointed out how impossible it was to forecast with any similar degree of accuracy expenditures which entailed future events, future decisions, future emergencies which could not be envisaged at the time. Obviously that is certainly true as far as our defence department is concerned. He pointed out, too, the problem of estimating revenue in times of full employment and inflationary pressures, or in times-and this was the experience of course the other way round during the early thirties-of falling employment when there were deflationary pressures in the country, when estimates of revenue were out in the other way, falling far short of expectations.
It is very interesting to recall at this moment that the budgets of both the United States and the United Kingdom, and for that matter in one other country with which I am familiar, namely Belgium, show exactly the same difference, perhaps not quite to the same degree but to a substantial degree between the estimates of expenditures and what actually has been spent, and the estimates of revenue and what actually has been received. The United States forecast quite a large deficit in the budget for this year. Actually 1 think they are running up about a $7 billion surplus at the moment. The British had a similar experience.


Mr. Maclnnis:: About the only way you can strike a balance is by estimating for a deficit.


James Sinclair: That is along the lines the hon. member for Greenwood suggested. The one point the leader of the opposition raised which I do question very much is this. He said the minister had no authority to raise such sums. The .actual authority given the minister is not to raise any sum, because the expenditures to be met are only an estimate. The authority is given to impose tax rates. It is quite true that tax rates are based on the estimate of what expenditures of the country are to be; but there is no question of the authority given by this parliament to the minister to impose those taxes.
The hon. member's comments on crown corporations were very interesting. Perhaps 94699-88
I touched on them slightly when I was dealing with the remarks of the hon. member for Greenwood. It is quite true that as far as crown corporations are concerned, such as that which controls Chalk River, there is an element of secrecy. On the other hand there is also a measure of-perhaps that is not the word-confidence in the operations of a company like the Canadian National Railways which is in daily competition with the Canadian Pacific Railway. The officials of this company have always felt that to allow their competitors to have full knowledge of all their working conditions and costs when they at the same time cannot receive similar information from the management of the Canadian Pacific Railway would be putting them at a disadvantage. That is one reason, of course, all crown corporations are not given the same treatment. But what this bill does do for the first time is to make all crown corporations now responsible through the appropriate minister to parliament for the tabling of their annual reports and their budgets. As you know, in the past these propriety corporations did not need to report to parliament. Just as long as they were not running in the hole they could go on for years and years without ever coming under parliamentary scrutiny. Polymer again is an example, because it ha9 been a successful corporation. It is only those corporations that do not pile up a surplus but must come back to parliament each year to get either grants or loans of money to make up their deficits that have been subject to annual parliamentary scrutiny. I think most hon. members would like to have a good look at operations of the successful corporations as well as at the unsuccessful corporations, and in that regard I think this bill represents a real step forward. It is perhaps in this feature that this bill is so different from the bill put through the house by Prime Minister Bennett in 1931, because at that time they did not have the problem of what we today refer to as crown corporations. It is true they had the Canadian National Railways, but at that time nobody referred to the Canadian National Railways as a crown corporation.
The last point that I should like to refer to is the reference to rushing. It has never been the intention to have this bill rushed through. We would like every hon. member to have all the answers he wishes to every clause of this bill. When the minister introduced this resolution for the first time last summer he said that the services of every officer of our department who could be of any help to any individual member of the committee to understand the background of any of these clauses were readily available.

Railway Act
I need not of course say to this house that the services of the Auditor General's department are at your command, because the Auditor General is not a branch of the Department of Finance but is a servant of the members of the House of Commons.


Mr. Deputy Speaker:: Is it the pleasure of the house to adopt the motion?


James MacKerras Macdonnell: I should
like to ask one further question. I was not clear as to the exact position regarding what we have described as legislation by estimates. I do recall that on one occasion the Prime Minister indicated that he was opposed to it, and I got the impression that he hoped it would be done away with. I am not clear as to whether there is anything in the bill to deal with that situation, and if not whether any other measure is in prospect.


James Sinclair: Under the treasury board section of the bill there is one section which contains the power to frame estimates, and it is in the estimates themselves where some of these continuing votes are actually listed as statutory. There will be an opportunity to raise the matter in committee, and to check it. The other point raised by the Prime Minister (Mr. St. Laurent) and by the Minister of Finance (Mr. Abbott) was that as other bills in which changes should be made come before parliament, for other reasons, it was hoped to make these changes at that time. That was my recollection of the understanding given at that time to the hon. member for Winnipeg North Centre.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the committee on public accounts.


Hon. Lionel Chevrier (Minister of Transport) moved: that the house go into committee to consider the following resolution:
That it is expedient to provide in the proposed measure to amend the Railway Act, Bill 12 now before the house, that the salaries of the chief commissioner of the transport board and of the other commissioners be increased and that the present chief commissioner be now, and that any subsequent appointee to that office become, on retirement therefrom, an additional puisne judge of the exchequer court.
He said: The object of this resolution is twofold. It seeks, first of all, to increase the salary of the chief commissioner of the board of transport commissioners, and of the other commissioners; and, secondly, to make the chief commissioner a puisne judge of the Exchequer Court of Canada.

The bill which will follow the resolution contains a provision for an increase in salary of the chief commissioner so that his salary will be equal to that of the president of the Exchequer Court of Canada. The committee on railway legislation did have before it a motion recommending an increase in the salaries of the other commissioners, but the chairman in his report to the house indicated that that motion could not pass because of a constitutional point, unless and until the government had given its approval. The government has done so, and the resolution now before the house is indicative of that fact. So the bill to be founded on the resolution will also have a section providing for increases in the salaries of the other members of the board of transport commissioners.
In so far as the second part of the resolution is concerned, namely that which also makes the chief commissioner a puisne judge of the exchequer court upon his retirement from the position of chief commissioner, I might point out that this is a provision which already existed, in effect, and that the former chief commissioner was also a member of the Exchequer Court of Canada.
With these observations I recommend the resolution to the house.


Howard Charles Green: Mr. Speaker, this resolution has a somewhat unusual background. In view of that, and in view of what the resolution seeks, members of the official opposition intend to oppose it.
I must give Your Honour and the house something of the history of the measure. Some weeks ago Bill No. 12 was introduced, designed to amend the Railway Act. In one of the sections provision was made for increasing the salary of the chief commissioner of the board of transport commissioners to equal the salary paid to the president of the exchequer court. In due course Bill No. 12 was referred to the special committee on railway legislation; and when that committee came to consider the sections of the bill one of the private members on the government side rose in his place and proposed an amendment to the effect that, in addition to the increase for the chief commissioner, there would be increases for the assistant chief commissioner, for the deputy chief commissioner and for all the other commissioners. '
The minister was a member of the committee and tried to look unconcerned and surprised. However, I do not think there is any question that it was very well known that this subject was to be taken up. In effect the minister said, "Well, I must consult my colleagues to see whether these increases are all right." After a day or so he came back and said that everything was fine with the

cabinet, and that therefore the committee could recommend the increases. Members of the official opposition who were on the committee opposed the recommendation for these increases and, as I have said, we propose to oppose the resolution today.
The salaries now being paid to the members of the board of transport commissioners are $15,000 per year to the chief commissioner, $12,000 to the assistant chief commissioner and $10,000 to each of the other commissioners, including one who is known as the deputy chief commissioner. Those salaries were increased just four years ago from $12,500 for the chief commissioner, $9,000 for the assistant chief commissioner and $8,000 for the ordinary commissioners, including the deputy chief.
As I have said, Bill No. 12 does provide for an increase in the salary of the chief commissioner from $15,000 to $16,000, so that he would then be getting the same amount as the president of the exchequer court. It also goes further and provides that if at any time he should retire from the position of chief commissioner, then until he becomes 75 years of age he is automatically one of the puisne judges of the exchequer court and, as such, would receive a salary of $14,400. There is no provision that he must be needed on the exchequer court. He is just made a judge of that court and continues as such at this salary until he becomes 75 years of age.
The amendment proposed in committee, as set out in the report of the committee to be found in yesterday's Votes and Proceedings, provides for increasing the salary of the assistant chief commissioner from $12,000 to $14,000, for increasing the salary of the deputy chief commissioner from $10,000 to $13,000, and the salaries of the other commissioners from $10,000 to $12,000. I would point out that county court judges are paid only $8,000, but we are being asked to approve an increase of $2,000 for the ordinary members of the board of transport commissioners. No argument was presented to justify this increase. It has just been pulled out of the hat, so to speak.
As a matter of fact the Turgeon commission on transportation recommended that the board of transport commissioners should be strengthened. Obviously the royal commission was concerned about the capabilities of the board of transport commissioners and recommended that it should be strengthened. But the royal commission did not recommend that the present members of that board be given an increase of salary of $2,000 for the ordinary commissioners, of $3,000 for the deputy chief commissioner and $2,000 for the assistant chief commissioner.
Railway Act


Mr. Brooks:: That is hardly strengthening the board.


Howard Charles Green: I submit that does not carry out the recommendation of the royal commission on transportation that the board of transport commissioners should be strengthened. This legislation might very well make it the more difficult to do anything about strengthening that board. It is not my intention to say anything further on the matter, but I repeat that the official opposition feel this is an unwise step to take under the conditions, and we propose to vote against the resolution.


James MacKerras Macdonnell: Mr. Speaker, it is much more pleasant to speak in favour of increasing salaries than it is to object; therefore I do not particularly relish the task before me. However, I am going to vote against this resolution and I think perhaps I had better give my reasons. The hon. member for Vancouver-Quadra (Mr. Green) has explained the rather unusual way in which this came about. I think it is fair to say that this does not come to us as the original considered judgment of the government. Presumably it is a matter which must have been much in the mind of the minister because it has been discussed a good deal; nevertheless the proposal did not come from the minister when the committee first met and the hon. member for Vancouver-Quadra has explained why.
My approach to this matter is a simple one. I regard $10,000 as a large salary. The hon. member for Vancouver-Quadra compared this salary with that paid to county court judges. County court judges are men of some eminence in their profession. I know something about university salaries and I know a university would be delighted to be able to pay $10,000 to its professors. However, we cannot pay that salary. Many eminent men are getting very much less. I have some knowledge of business, and I know that $10,000 jobs do not grow on every bush. A man who gets $10,000 is generally a man of ability and service and experience.
Therefore I feel justified in voting against this resolution, but in doing so I do not mean it as a criticism in any way of the members of the board. I do it purely on the basis of believing that $10,000 is a good salary for men doing work of distinction and importance in the community.


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, in view of the fact that my friends to my right propose to call a vote on this resolution, I think I should say a word or two. The two hon. members of the official

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opposition who have spoken have indicated that they intend to vote against this, and the only way you can vote against a resolution is to call a vote. If they are going to call a vote I feel it to be my duty as a member of the committee to say why I am going to vote for the resolution.
I heard the discussion that brought about the amendment which led up to this resolution. I disagree with my respected friend, the hon. member for Vancouver-Quadra (Mr. Green), when he says no argument was' presented to the committee to justify the proposed increases. Perhaps I should be the last one to say this, but in my opinion this resolution is aimed at removing a discrimination. I feel strongly on that point. The official opposition voted against an amendment proposed by me in committee; and in that the personnel which will share in these increases are all members of the legal profession and-


An hon. Member:: No.


Clarence Gillis: Just a minute. When the bill was under discussion we objected to the provision that the commissioner, the assistant commissioners and the members of the board must be members of the legal profession with at least ten years of practice.


Howard Charles Green: On a point of order, I am sure the hon. member for Cape Breton South (Mr. Gillis) would not want to make a mistake if he had the necessary knowledge. It is not provided that the ordinary members of the ooard must be barristers.


Clarence Gillis: Just a minute.


The Acting Speaker (Mr. Beaudoin):: The
hon. member for Vancouver-Quadra (Mr. Green) must not interrupt the hon. member who has the floor without his consent. The hon. member for Vancouver-Quadra did not raise a point of order; he merely explained a point, and that should be done after the hon. member who has the floor has concluded his remarks.


Clarence Gillis: I am always pleased when those with whom I am arguing get excited enough to get up as that is a clear indication that my argument is having effect. The chief commissioner and the assistant chief commissioner must be members of the legal profession with outstanding qualifications.


Howard Charles Green: Now you are right.


Clarence Gillis: We said that should not be so. We wanted to know why men from the trade union movement possessing the necessary qualifications could not be appointed. Why should not some outstanding economists be appointed? Running a railroad is an economic
(Mr. Gillis.]
proposition. However, we lost; and we bowed to the will of the majority in the committee. The hon. member for Vancouver-Quadra and other members of the opposition insisted that they must be members of the legal profession.
This brings up the question of remuneration for their services. In the past year or so we have increased substantially the pension rights and salaries of the members of the judiciary, and I submit that we should not have discrimination against the legal profession in this legislation. Why should we ask men with outstanding qualifications to give public service on this board for ten or fifteen years, and then when they are through find themselves on the beach? I think there is every justification for removing that discrimination by bringing the salaries of the members of the board of transport commissioners in line with the salaries and pension rights of members of the judiciary. Every reasonable argument with respect to removing the discrimination went through my mind, and I was quite prepared to see the salaries increased to the extent proposed in the committee and now contained in an amendment to the bill. It is removing a discrimination against the profession to which the hon. member for Vancouver-Quadra (Mr. Green) belongs. I am always prepared to do that kind of thing. In the second place, I have heard arguments advanced on a good many occasions in the house against increasing the salaries and pensions of members of the judiciary, and the hon. member for Greenwood (Mr. Macdonnell) and other members have risen and waxed very eloquent about it. They said that if we were going to get responsible men with high qualifications we had to remunerate them sufficiently so they would be available for appointment to these very important positions.
I consider the board of transport commissioners just as important a body as any court in this country. They deal with more complicated problems than merely deciding whether or not someone should go to jail. In fact they have much to do with the whole economic future of the Dominion of Canada. So far as I am concerned they have had no increase in remuneration since 1947, and since that time there have been many changes in the structure of prices and so on. I am making my decision to support the resolution on the ground that we are removing a discrimination between equally qualified personnel on the board of transport commissioners and those who occupy high offices in the judiciary in this country.


Mr. Solon E. Low (Peace River):: Mr. Speaker, the royal commission on transportation recommended the strengthening of the

board of transport commissioners. We are in complete agreement with that recommendation because we feel there is no more important judicial body in the Dominion of Canada, nobody who has more to do with the welfare of most Canadians, than the board of transport commissioners. The minister has brought before the house a resolution proposing to remunerate the members of the board sufficiently to attract the very best men. I presume that if the best men are attracted by the salaries that are to be offered we can reasonably expect the board to be not only efficient but active. I think one of the things the royal commission suggested was that they be more active, that they should engage in more active investigation and keep themselves thoroughly informed at all times. Under these circumstances, because of the fact that we must have the very best men we can get and that once we get them and pay them well we can expect better service from them, we will support the resolution.


Alfred Johnson Brooks: I should like to ask the minister how many members there are on the board. I understand that they are appointed for ten years. I should also like to know what length of time each member still has to serve. We talk about improving the membership of the board, but if the members still have a number of years until the end of their terms how are we going to get new men on the board in the meantime?
The Aciing Speaker (Mr. Beaudoin): Perhaps these questions might be asked more properly when we are in committee.


Alfred Johnson Brooks: I thought I might as well ask them while we were discussing the matter.


The Acting Speaker (Mr. Beaudoin):: understand that we are discussing it now, but we are considering a motion that Mr. Speaker leave the chair for the house to resolve itself into committee of the whole on the resolution, and I do not think questions are in order at this point. Is it the pleasure of the house to adopt the motion?


Howard Charles Green: No.


Mr. Fulton:: I was paired with the hon. member for Yorkton (Mr. Stewart), who is ill in hospital. Had I voted, I would have voted against the motion.


Mr. Ross (Souris):: I was paired with the hon. member for Melville (Mr. Gardiner). Had I voted, I would have voted against the motion.
The house went into committee, Mr. Dion in the chair.


Lionel Chevrier: Mr. Chairman, one or two questions were asked during the discussion of the main resolution which I should like to answer at this juncture. The hon. member for Vancouver-Quadra indicated that this resolution was pulled out of a hat, as it were. I want to assure him that such is not the case, that the government approved of the increases for other members of the board of transport commissioners for several reasons. One of the reasons was that given by the hon. member for Cape Breton South, namely that there was a substantial discrepancy between the salary which the chief commissioner will be in receipt of when this bill goes through and the present salaries of the members of the board of transport commissioners. Then again, another reason is that over a period of many years the salaries of members of the board of transport commissioners have been higher, as a general rule, than those of all other boards. They also have been comparable to the salaries of the members of the judiciary for some time. The report of the Gordon commission, which was established in 1946, dealing with administrative classifications in the public service, to which is added an appendix D, sets out and recommends in effect that the members of the board of transport commissioners should receive at least $2,000 more than the amounts recommended for members of other boards. During the discussions in the committee I indicated what was said by the royal commission on transportation. At page 273 of their report they stated that, because of the tenure of office of the members of the board, they felt consideration 
should be given to their present status. Having regard to all that, the government consented to the motion which was made in committee.
As to the question which was asked by the hon. member for Royal, there are normally six members of the board of transport commissioners. At the present time there are five. There is one vacancy. They are appointed for a period of ten years.


Alfred Johnson Brooks: I asked the minister to tell us how long each of the individual commissioners-


Lionel Chevrier: I am sorry, but I cannot follow what the hon. member is saying.


Alfred Johnson Brooks: I beg the minister's pardon?


Lionel Chevrier: I did not understand the hon. member's question.


Alfred Johnson Brooks: I thought I made it quite clear.


Lionel Chevrier: I could not hear. Someone was talking to me while the hon. member was asking the question. Would he mind repeating it?


Alfred Johnson Brooks: I should like to know the length of time each commissioner on the board has to run.


Lionel Chevrier: I could not give that information from memory. I could get it during the course of the debate on the bill. As to the chairman, he has just been appointed. As to Commissioner MacPherson, his term was extended last year, I believe. As to Commissioner Chase, I think the same applies to him. As to Commissioner Sylvestre and Commissioner Wardrope, I could not say; I would have to inquire. But I will get the exact details and give them to my hon. friend.


Howard Charles Green: There is, of course, a complete answer to the minister's statement that the government has given such careful thought to the need for increasing these salaries, and the answer is this. On October 23 first reading was given to Bill 12 amending the Railway Act. In that bill the government did not see fit to provide for these increases at all; there was no suggestion whatever that the government thought the salaries should be increased until, in the committee last week, or it may have been the week before, a private member stood up and moved that these increases be brought into effect. Therefore the minister's argument that this had all been carefully considered and that there was a very good reason for the increases is just a lot of poppycock, in view of the manner in which the matter was handled.


Mr. McLure:: We are all in pretty nearly the same boat in this, in that we do not know what we are dealing with. So far as I

am concerned, I have this resolution before me, and I do not know whether it deals with the board of transport commissioners or all the other boards such as the maritime transport commission, the board of transport commissioners, the royal commissioners, the transport controller and so on. What is the jurisdiction of all these boards? I remember that in 1945 and 1946 I took objection to this board of transport commissioners on the ground that they had no jurisdiction, to deal with certain problems of my province, at any rate. However, they were sent down there at that time, and they had a sitting. After a week or ten days and a great deal of expense they ended their sitting and decided they had no jurisdiction. Since that time I have often wondered whether any jurisdiction had been given to them.
A few days ago I noticed that they gave a ruling with reference to a railway bridge in my province. It was a most peculiar ruling. I think I have something here that explains it. One of the members, I think it was the chief commissioner, who has since resigned, filed a minority report. As hon. members know, this bridge was operated by the Canadian National Railways in conjunction with the Murray Harbour Railway. As I said a few days ago when speaking on a railway matter, the theory is they are going to pull up the railway track for 45 or 50 miles and ship it off to some other place. But listen to the report of the commissioners. Two of them found this-


Louis-René Beaudoin: Order. Perhaps I should remind the hon. member that this resolution deals with an increase in the salaries of the board of transport commissioners. It has nothing to do with the reports the board has made from time to time. The hon. member may find an opportunity to discuss this matter when the bill is before the house.


Winfield Chester Scott McLure: Mr. Chairman, I do not know, but it always seems to be my lot that when anything comes up and Your Honour has the privilege of being chairman of the committee you like to push me off.


Louis-René Beaudoin: Order. I am always very sorry when it is my misfortune to call the hon. gentleman to order. But I think he would not want to leave on Hansard the words he just used, namely that the chairman likes "to push me off".


Winfield Chester Scott McLure: Mr. Chairman, we will bury the hatchet at that.


Stanley Howard Knowles: It depends on where you bury it.
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Winfield Chester Scott McLure: We are dealing with the board of transport commissioners and the increase in the salaries that they are to receive. I wa9 just speaking about the jurisdiction of this board and how they are to operate in the future. These men are going to get great increases in salaries, and I was just trying to prove that they had no jurisdiction and when they do bring in a report it is what you might call an unreasonable one. I was just quoting from a recent report. I had just got this far and said that when they were dealing with this bridge that they have now condemned here is what two of them said after the chief commissioner had brought in his report but not in accord with theirs:
Having regard to the fact that the railways have from time to time found it necessary to apply for increased freight rates, etc., which are generally opposed by the public-
That is true, all right. I continue:
-it would appear only right that the board should approve of any applications which will result in economies of operation whenever and wherever such economies can be effected without causing undue inconvenience to the public.
Therefore they do away with this little railway down in Prince Edward Island.


Louis-René Beaudoin: Order. I think the hon. member will be reasonable enough to realize that by this time he is definitely out of order.


Howard Charles Green: Surely it is in order for an hon. member to point out where there have been extremely unwise decisions made by the board. This is a resolution which is preliminary to a measure which will increase their salaries. Surely an hon. member can submit cases to show that the increases should not be granted. That is all the hon. member for Queens is doing.


Louis-René Beaudoin: The hon. member for Vancouver-Quadra has put his finger on the very point. This is a preliminary measure, and perhaps when the bill comes before the house the other points concerning the jurisdiction of this board and the reports they have made from time to time may be discussed. Right now all we have before us is a resolution dealing with the increases in their salaries; that is all.


George Alexander Drew: Mr. Chairman, I suggest in all seriousness that what the hon. member is doing is supporting the contention that the board needs to be strengthened. After all he is showing why it should be strengthened, although he does not agree it can best be strengthened by increasing the salaries of the same people.


Lionel Chevrier: I do not think that because we have two hon. members taking the same attitude it strengthens the point of order. As

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I understand the point of order, the hon. member is trying to discuss a matter concerning the Hillsborough bridge on this resolution. Surely that is entirely out of order. He also wants to discuss the matter of freight rates. If he wants to deal with the increase in the salaries and the duties of the board, that is another thing. In fairness to the committee, since we did not allow a discussion on the freight rates on the bill when it was before the house and on the earlier resolution, surely we should not allow it at this stage.


Winfield Chester Scott McLure: During the discussion of these things I was endeavouring to show that in getting these extra men who are to be appointed at high salaries, we should get men who would not bring in unwise reports such as the one I referred to. I will go this much further and say this. The board of transport commissioners that I have had anything to do with for the last six or seven years never gave us any consideration because they did not know where they were in regard to it. What I should like to see brought in is another amendment washing out the board of transport commissioners entirely. We have far too many of these things. We have the maritime commission for the railways, we have a controller of boxcars and reefer cars and all these things. After all, anything that our province has to do with the railways cannot be done through the board of transport commissioners. They have no jurisdiction to set freight rates. We cannot deal with subcontractors. Our contract is with the Minister of Transport and the government, and that is the reason I want to express myself at this time to the effect that the board of transport commissioners, as applied to the problems of our province, are not worth a pinch of snuff.


Stanley Howard Knowles: I should like to ask a question with regard to the wording of the resolution. It says that the present commissioner is to be now an additional puisne judge of the exchequer court. Then, later on it says "on retirement therefrom". Which is it? Does the present chief commissioner become now a judge of the exchequer court or does he become such upon his retirement from his present position?


Lionel Chevrier: Both.


Howard Charles Green: What procedure will be followed, once this resolution has been passed? Will it be an amendment to Bill 12, or is there to be a new bill entirely?


Lionel Chevrier: When we reach the end of
this discussion I propose to move that this resolution be referred to the committee of the whole on Bill 12, and then when we get to the section dealing with the salary and
rM>. Chevrier.]
position of the chief commissioner I propose to ask my colleague the leader of the house to move an amendment to that section.


Howard Charles Green: And will the minister clear up the situation with respect to the chief commissioner becoming a puisne judge of the exchequer court? As I read Bill 12, upon his retirement from the position of chief commissioner he will become what is called a supernumerary judge of the exchequer court, and will continue to be such supernumerary judge until he becomes 75 years of age. Presumably as such supernumerary judge he will draw a salary the same as other puisne judges of the exchequer court, namely $14,400. And he will do that regardless of whether he is functioning as a judge of the exchequer court. Am I wrong in that summing up?


Lionel Chevrier: I wonder if my hon. friend
would allow me to explain that when we get into committee of the whole on Bill 12, because the amendment which I shall ask my colleague to move will deal with those very points. I undertake now to make that explanation, and I hope I shall do so to the satisfaction of my hon. friend.


Stanley Howard Knowles: Perhaps the amendment
will be clearer than the resolution.


Lionel Chevrier: It will be more detailed, I
can assure you.


Mr. Herridge:: What are the minimum
educational requirements and administrative experience required by the government in making an appointment to the board of transport commissioners?


Lionel Chevrier: If my hon. friend would
take the trouble to look at section 1 (2) of the Railway Act as it now stands he will find there the qualifications required to become chief commissioner and assistant chief commissioner.


Herbert Wilfred Herridge: I have asked for the qualifications required for commissioners.


Lionel Chevrier: The qualifications required
for the chief commissioner and the assistant chief commissioner are that they be judges of a superior court, or at least barristers of ten years' standing. There is no qualification set out in the act with respect to commissioners. I take it that men of standing in the community, such as have been appointed in the past, would be appointed in the future.


Stanley Howard Knowles: What community?


Mr. Hodgson:: I understand the commissioners get $10,000 a year now, and this increase brings them up to $12,000; is that right?


Lionel Chevrier: Yes.


Clayton Wesley Hodgson: I think $10,000 is a fair
salary for any commissioner. A short time ago railwaymen had to go on strike to get increases of from $10 to $25 a month. Yet here with one stroke of the pen we give commissioners an increase in salary of $2,000. In my judgment it does not just add up.


Louis-René Beaudoin: Shall the resolution carry?


Gordon Knapman Fraser: On division.
Resolution reported, read the second time and concurred in.


Lionel Chevrier: I move that this resolution
be referred to the committee of the whole on Bill 12.


[Stage Direction]
Motion agreed to,


Lionel Chevrier: that the house go into committee on Bill No. 12, to amend the Railway Act.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.
On section 1-Reappointment.


Howard Charles Green: Is the minister going to make any general statement on this section?


Lionel Chevrier: No. I think the statements I have already made are sufficiently indicative of the meaning of the bill. The proceedings which took place in committee, too, will indicate to those who want to read them the tenor of the discussion there.
However, before we proceed to the discussion of section 1, I would ask my colleague to move the new section 1. Before he does move it I should like to advise the committee that it is in practically the same language as the present sections 1 and 2, with the exception that section 2b is spelled out far more than in the present bill. Then there is an addition to section 2 dealing with the present incumbent, together with section 3 which indicates the time at which the whole section shall come into force. I would ask my colleague to move it.


Alphonse Fournier: I move:
That sections 1, 2 and 3 of Bill No. 12 be deleted, and the following be substituted therefor:
"1. (1) Subsection five of section nine of the Railway Act, chapter one hundred and seventy of the Revised Statutes of Canada, 1927, is repealed and the following substituted therefor:
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'(5) A commissioner on the expiration of his first or subsequent term of office shall, if not disqualified by age, be eligible for reappointment for a period not exceeding ten years.'
(2)	Subsections two, two (a) and two(b) of section ten of the said act, as enacted by section one of chapter sixty-six of the statutes of 1947-48, are repealed and the following substituted therefor:
' (2) Any person may be appointed chief commissioner who is or has been a judge of a superior court of Canada or of any province of Canada, or who is a barrister or advocate of at least ten years' standing at the bar of any such province.
(2a) Sections twenty-two, twenty-three, twenty-six, twenty-seven and twenty-eight of the Judges Act, 1946, apply in respect of the chief commissioner as though his service in the office of chief commissioner were service in the office of a judge of the exchequer court, and notwithstanding anything in the Civil Service Superannuation Act the chief commissioner is not a civil servant for the purposes of that act.
(2b) Where the term of office of a chief commissioner expires before he has attained the age of seventy-five years and he has not, prior to the expiration of such term, been reappointed as chief commissioner for a further term, he becomes, at the time such term expires and without any appointment pursuant to the provisions of the Exchequer Court Act, a puisne judge of the exchequer court in addition to the number of judges of the exchequer court provided for in the Exchequer Court Act and the Judges Act, 1946, and with the same jurisdiction, tenure of office and salary as other puisne judges of the exchequer court: and for the purposes of sections twenty-two and twenty-three of the Judges Act, 1946, his period of service as chief commissioner shall be added to his period of service as judge of the exchequer court, and for the purposes of section thirty-two of the Judges Act, 1946, his salary as a puisne judge of the exchequer court shall be deemed to be payable under that act.
(2c) Where a chief commissioner who made an election under section twenty-six of the Judges Act, 1946, in respect of his office as chief commissioner becomes a puisne judge of the Exchequer Court pursuant to subsection two (b), no further election under that section is necessary and the election he made in respect of his office as chief commissioner shall be deemed to have been made in respect of his office as a puisne judge of the Exchequer Court at the time he became such a judge.
(3)	Subsection one of section twenty-six of the said act, as enacted by section two of chapter sixty-six of the statutes of 1947-48, is repealed and the following substituted therefor:
26. (1) The chief commissioner shall be paid an annual salary equal to the salary of the president of the Exchequer Court; the assistant chief commissioner shall be paid an annual salary of fourteen thousand dollars, the deputy chief commissioner shall be paid an annual salary of thirteen thousand dollars, and each of the other commissioners shall be paid an annual salary of twelve thousand dollars.


Stanley Howard Knowles: I think we have been given quite a mouthful. As a matter of fact, we have had read to us the revised form, not just of section 1 but of sections 1, 2 and 3. I do not blame the Minister of Public Works because he just had it handed to him a minute ago, but I think these sections should be dealt with one at a time. I tried to follow what was being read and to compare it with the sections of the bill before me, and I did not notice any change in section 1 nor in section 2 until we got down to 2 (b).

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Lionel Chevrier: Would the hon. member allow the Minister of Public Works to complete reading the whole amendment and then I shall try to explain it to the committee. I think that would make for a more intelligent discussion.


Stanley Howard Knowles: I thought he had completed reading it; he did sit down.


Alphonse Fournier: Sections 2 and 3 will read:
2.	The person holding the offices of chief commissioner of the board of transport commissioners for Canada and puisne judge of the Exchequer Court of Canada at the coming into force of section one of this act shall continue to hold those offices as though subsections two and three of that section had not been enacted, except that
(a)	the said office of puisne judge shall be deemed to be in addition to the number of puisne judges of the Exchequer Court of Canada provided for in the Exchequer Court Act and the Judges Act, 1946;
(b)	the salary annexed to the said office of puisne judge shall be equal to the salary payable to other puisne judges of the said court and for the purposes of section thirty-two of the Judges Act, 1946, shall be deemed to be payable under that act; and
(c)	the salary payable to the said chief commissioner under the Railway Act shall be equal to the salary of the president of the Exchequer Court of Canada, less the salary received by him as puisne judge of that court.
3.	Sections one and two of this act shall come into force on the first day of January, nineteen hundred and fifty-two.


Lionel Chevrier: I think I should say at the outset that sections 1, 2 and 3 of the bill now before the committee are being amended by the amendment which the minister has moved. I presume the committee will want me to explain the effect of this amendment.


Stanley Howard Knowles: It seems to me that we could listen to the minister's explanation more intelligently if we had these revisions before us. After all, we have had quite a bit read to us just now. I suggest that these sections stand and we go on with the other parts of the bill. As a matter of fact they might stand until tomorrow, when we would have this material before us in Hansard.


Howard Charles Green: Perhaps the minister could furnish us with typed copies of the proposed amendment and then make his statement at eight o'clock, after we have had an opportunity to read it.


Lionel Chevrier: I think that is possible.


Howard Charles Green: I presume the changes are not very extensive.


Lionel Chevrier: That is a fair suggestion. I shall have copies made and distributed so we can discuss this amendment more intelligently at eight o'clock.
At 6.15 p.m. the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Lionel Chevrier: Perhaps I should explain the meaning of the amendment, copies of which I hope the committee has received since we adjourned for the dinner recess.


Stanley Howard Knowles: Only a few minutes ago.


Lionel Chevrier: I admit that is so, but mind you it is a task to prepare one hundred copies in the short time we had. If it had not been for the assistance of the Hansard office it would have been impossible. Briefly the meaning of the amendment is as follows: Clause 1 (5), which corresponds with 1 (5) in the present bill 12, simply provides for the reappointment of a commissioner for a period not exceeding ten years. In other words it permits a commissioner to be reappointed for a term of less than ten years if that be found necessary. There is no change in that section. Neither is there any change in subsections 2 and 2a. Subsection 2 provides for the qualifications of a chief commissioner, namely, that a chief commissioner must be a judge of a superior court of Canada or of any province of Canada, or a barrister or advocate of at least ten years standing at the bar of his province. Subsection 2a provides that the sections of the Judges Act relating to annuities and pensions shall apply to the chief commissioner as if he were a judge of a superior court.
Subsection 2b is in essence the same, but certain language has been added which strengthens the clause as it stood before. It provides for the appointment of the chief commissioner as a puisne judge of the Exchequer Court of Canada before he has attained the age of 75. Subsection 2c is new. It provides that where the chief commissioner makes an election under the Judges Act no further election is necessary as a puisne judge of the exchequer court at the time he becomes such puisne judge.


Howard Charles Green: Has that to do with pension?


Lionel Chevrier: Yes, and it also has reference to the distribution of the pension to his widow. Everything I have discussed so far is purely academic and has to do with future chief commissioners, whereas section 2 provides for the present chief commissioner. Perhaps I should not have overlooked subsection 3. It is in exactly the same language as subsection 3 of the bill and is the one which provides for increases in salaries. There is no change there.


Howard Charles Green: It is not the same as 3 in the bill. It is somewhat the same as the committee's recommendation.


Lionel Chevrier: Yes. Thank you for bringing that to my attention. That is a fact. It is not the same as in the bill. It is the same as the motion made in the committee, which we have adopted. It provides for the salary of the chief commissioner to be the same as that of the president of the exchequer court. It provides for the salary of the assistant chief to be $14,000, that of the deputy chief $13,000 and that of each of the commissioners $12,000. Section 2, as contained in the amendment now before hon. members, deals with the office of the present chief commissioner, and I think that needs no explanation. It is clearly set out in subsections (a), (b) and (c) what the intention is. Section 3 provides that sections 1 and 2 of the act shall come into force on the first day of January, 1952.


Stanley Howard Knowles: On the question of form, I understand then that the subject matter of what is comprised in sections 1, 2 and 3 of the printed bill is all being compressed, with some changes and additions, into the new section 1.


Lionel Chevrier: That is right.


Stanley Howard Knowles: And that there are new sections 2 and 3.


Lionel Chevrier: That is right.


Howard Charles Green: We have not had very long
to consider these changes in the first three sections of the bill, and I should like to take the opportunity of making .a few general remarks with regard to it, as is the custom on the first section of a bill. Perhaps that will give other members a chance to review these amendments that are to be made. I am rather sorry the minister did not say something concerning the work of the committee, and with reference to the bill as it has come back from the committee.
Those members of the house who, like myself, were fortunate enough to be members of the special committee on railway legislation found the work extremely interesting, and I hope it will be beneficial to the country. I must admit that we are hardly qualified as experts by reason of the fact that we have been sitting as members of the committee for a couple of weeks, but at least we do know a little more than we knew before the committee started to sit. Not many witnesses appeared before the committee. There were two from the Canadian Pacific Railway and there was one spokesman for the Canadian National Railways, although of course other officials of that railway were present and also other officials of the Canadian Pacific. I think it was unfortunate that the Canadian National was not allowed to take a more active part in the work of the committee.
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The Canadian Pacific had to make all the submissions against the bill, and of course in the process got a certain amount of kicking around. I would have appreciated having similar comments from the spokesman for the Canadian National Railways, but perhaps he was handicapped by the minister.


Lionel Chevrier: Not in the slightest.


Howard Charles Green: One got the impression that
he had the wraps on, and I thought perhaps the minister was responsible. However, there is no doubt that when it comes to the fixing of freight rates both the railways will be together. They have been in the habit of making applications in the name of the Railway Association of Canada, and I have no doubt they will continue to do so in applying for increases in rates.
Then we heard representatives from eight of the provinces; that is, all the provinces except Ontario and Quebec. These two provinces were not represented, I presume because they are not very interested in this bill. It is obvious that the shippers in those provinces are confident they are not going to pay very much higher freight rates than they are paying today. Ontario and Quebec were not represented, either, before the royal commission on transportation. The minister will correct me if I am wrong, but I believe those provinces did not make any representations to the Turgeon commission.


Mr. Blackmore:: They always win.


Howard Charles Green: Well, in so far as freight rates are concerned they have been winning thus far and perhaps they will continue to do so.
There has been an impression abroad that this bill lays down some new national transportation policy. In the earlier debate I may have made a statement to that effect myself, but I believe we should make it absolutely clear that there is no such intention. The bill deals only with railway freight rates. There is no attempt at all to deal with rates by water, by air or by road, so that by no stretch of the imagination can it be considered a bill to bring in a national transportation policy.
Section 332A of the Railway Act does, however, proclaim what is called a national freight rates policy. Even that name gives a wrong impression, because if members will refer to the section, which is contained in section 7 of the bill, they will find that there are quite a few exceptions to this national freight rates policy. For example, all joint international rates between points in Canada and in the United States are excepted from this new policy; rates on export and import

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traffic through Canadian ports where in practice such rates bear a fixed and long-standing relationship with rates on similar traffic through ports in the United States are also exempted. A third group of exceptions are the competitive rates, which form a large group, and the agreed charges authorized by the board under part V of the Transport Act of 1938. The rates over the White pass and the Yukon route are excepted. There is also an exception for all the Crowsnest rates which are statutory rates applying principally to the hauling of grain. Another group of exceptions are all the rates subject to the Maritime Freight Rates Act.
The representatives from the maritimes were not satisfied that this exemption of the rates under the Maritime Freight Rates Act protected them; and at their request, and with the approval, may I say, of all the members of the committee and the representatives of the four western provinces, an additional exception was written into the bill to protect the maritimes. It will be found in a new paragraph (f) of section 332A of the Railway Act, which reads:
(f) rates applicable to movements of freight traffic upon or over all or any of the lines of railway collectively designated as the "Eastern Lines" in the Maritime Freight Rates Act as amended by the Statute Law Amendment (Newfoundland) Act.
This means, Mr. Chairman, that the national freight rates policy begins at Levis, Quebec. It does not apply east of that point, so the eastern part of Quebec and the four maritime provinces, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland are excepted. In the general result too I do not believe Ontario and Quebec are going to be very much affected by this national freight rates policy. In those provinces much of the carriage of goods by rail is subject to competition from ships and from trucks. This means that there are competitive rates in Ontario and Quebec which are lower than the ordinary type of rates, and as such they are excepted from the provisions of section 332A which contains the national freight rates policy. The Canadian Pacific representative stated that over 41 per cent of the freight traffic being carried by that railway would come under these exceptions, and only about 59 per cent would be subject to the so-called national freight rates policy. We should not fool ourselves that the bill, good as it is in most of its provisions, constitutes a new national freight rates policy.
Another fact we should bear in mind is that these provisions will not be implemented for a period of several years. The class rates will not be finally dealt with by the board

of transport commissioners for a year and a half or two years. After that the commodity rates have to be reviewed and brought under the terms of this section. It may, therefore, be four or five years before this policy really comes into effect. I am not criticizing that delay. I assume it cannot be avoided. But we should remember that there will be all this delay in implementation.
Another important feature of the bill has to do with these competitive rates. As I have said, they are excepted from the new freight rates policy; they do not come under it at all. They are especially low rates put in by the railways to enable them to meet competition. Most of such rates are in effect in Ontario and Quebec. The bill, in section 331, seeks to tighten up the competitive rates. I think there is an attempt to make it more difficult for the railways to bring in these competitive rates. If something cannot be done about them there is not going to be much chance of the eight provinces being relieved of any of the burden of railway freight rates. I suppose it is hoped that this section 331 will make Ontario and Quebec pay higher rates than they have been paying in the past. They obviously do not much fear that result because they did not bother to come before the committee.
I would point out that under section 331, in order for a railway to justify putting in a competitive rate, several things must be proved. In the first place the railway must show that the competition actually exists. Then it must show that the competitive rates are compensatory. In other words it cannot put in a rate that is below what costs will be. Then the railway must show that the rates are not lower than necessary to meet competition. All these conditions must be met in order to justify a competitive rate. But once the rate is put in the railways are free to abolish it or to raise it at will. The board of transport commissioners has no control over the abolition or the increase of these competitive rates.
As I have said, section 331 is the code dealing with competitive rates. But there is another section in the bill which also deals with them, namely section 332B. It deals with one type of competitive rates known as the transcontinental rates; they are the rates on goods carried across the country where there is competition between the ships and the railways, as for example at Vancouver. A special provision is made with regard to that one type of competitive rate. Section 332B writes in a ceiling on what can be charged to the intermediate areas-primarily the prairie area-and provides that

the rates at the intermediate points cannot be over 1$ of the through transcontinental rate.
There will be an opportunity to debate that section when we come to it. I have no intention at this moment of going into that question any further. It is highly contentious. Here again Ontario and Quebec are not interested, and I do not think the maritimes are interested. But unfortunately the provision has lined up the provinces of British Columbia and Manitoba on one side, against the section, and the provinces of Alberta and Saskatchewan on the other in favour of it. The section has had that result. The governments of these provinces had representatives appear before the committee, the British Columbia and Manitoba representatives opposing the section and the Alberta and Saskatchewan representatives approving it. I greatly regret that this has taken place. I think it is unfortunate for western Canada. I believe the difficulty could have been dealt with in another way, in order to avoid this friction, but at the moment that is the position. Section 332B is a subject of great controversy among the four western provinces.
Another provision in the bill is that a subsidy of $7 million will be paid to help to defray the cost of maintaining the tracks of both railways across the - rocky part of northern Ontario which in the past has been considered rather unproductive. The district is between Sudbury and Fort William on the Canadian Pacific Railway and between Cap-reol and Fort William and between Cochrane and Armstrong on the Canadian National Railways. The payment of this subsidy is to help keep down the freight rates on goods that have to go over that unproductive area.
I think that plan met with the general approval of members of the committee and also of all the representatives who appeared to give evidence. The details are not worked out in the bill. Hon. members will find all the provisions in section 18. The implementation of the policy has been left to the board of transport commissioners. It has been given wide discretion to say how much shall be paid to each railway and on what basis the amounts will be worked out. I think this policy of subsidizing that so-called bridge or gap is sound.
Then there is one other thing which has occurred to me as a result of the sittings of the committee. I think it is not accurate to describe the bill as an equalization bill. In the press and in our speeches the bill has been referred to in that way. I suppose that has been done because over the years the freight rates fights have been called fights to
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equalize the rates, and that word "equalization" has been used to describe all the attempts that have been made to improve our freight rate structure. There is really not a great deal of equalization under this bill.
We might have equalization if we removed all the exceptions to the new section 332A; for example, if we removed the Crowsnest rate- I can hear every hon. member from the prairie provinces starting to swear under his* breath the minute that is even mentioned in a debate; and nobody is suggesting that it should be done-or the maritime freight rates. If we are to have equalization, real equalization, then I suppose the Maritime Freight Rates Act will have to go out the window. Now all the maritimers start to shake then-heads, and I quite agree with them. But this shows you how far we are from having real equalization of rates in this bill or in the near future. I suppose the only true equalization in Canada would be to have a freight rate structure such that you paid the same to have a car brought from Oshawa to Vancouver as you paid to have it carried by rail from Oshawa to Montreal. That is the kind of equalization that would appeal to me. If we had that sort then we would have what could properly be called equalization. However, I guess that is a long way in the future, too. Or we might have equalization by a wider system of subsidies. It may prove to be a good policy for Canada, through her federal taxation, to subsidize freight rates in different parts of the country so that Canadians would pay the same rates no matter where they may live.
However, we will be inaccurate if we describe this as an equalization bill. I think the minister will agree with me when I say that it is perhaps a start on equalization, but it can be more truly described as a step towards improving the freight rates structure of Canada. I believe it is certainly that. All the members of the committee, and also I think all the witnesses who appeared before the committee, were equally glad to have a measure of this kind being made law, with the idea that it would be a step towards improving the Canadian freight rate structure.
These are just rambling remarks having to do with the whole bill, and the impressions I gained as a result of those very interesting days spent on the special committee on railway legislation. As I have said, there will be further debate of course on the different sections. I am reserving my right to debate section 332B, and no doubt other hon. members will also wish to speak on that same section.

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Mr. Laing:: For a few moments I should like to make some remarks concerning this bill. I will not be as pessimistic concerning its future as the hon. member for Vancouver-Quadra.


Solon Earl Low: That would be refreshing.


Arthur Laing: In the main it is a very good bill.


Howard Charles Green: I agree with you.


Arthur Laing: It is a bill which as a start implements the report of the Turgeon commission on transportation. I want to say that I do not think a finer report has ever been presented to a government of Canada by any commission appointed. There is material in that report that will stand us in good stead, transportationwise, for many many years in Canada. As the hon. member for Vancouver -Quadra said, this bill, as a beginning-perhaps just a beginning-of the implementation of that report, I think is a little bit of a monument in transportation affairs in the Dominion of Canada. We do not realize what the railways have meant to Canada. In our own case, in the province of British Columbia, it was by virtue of the guarantee that the railway would come west that we came into confederation. In the days when the railways first went through, transportation was simple and the railways' revenue was secure. That situation does not pertain today. The railways are being harassed on every side by every other competing mode of transportation. In our own city of Vancouver today we have 25 trucks coming in daily from San Francisco, with two drivers to a truck, 50 hours out of San Francisco. They do not back their freight load against a team-track downtown; they back it right up to the warehouse or put it inside the warehouse. The railways, with fixed rolling stock and fixed locations and so on, are sitting ducks for that type of competition. We have a railway problem in Canada because the nature of traffic in this country is such that we cannot move it, and will not be able to move it for many years to come, or at least in the foreseeable future, without railways. That is why we have a railway problem.
I know many Canadians in my part of the country who occasionally ride on United States railways as passengers. They come back and say: "Why can't we have these lovely trains in Canada that they have in the United States?" Well, last year Canada lost $20 million on passenger transportation, and I do not know that they would be justified in providing any better equipment than we have today. For the volume of

traffic they have and the distance over which they run I think their passenger service is very very good indeed.
The railways have done a great work for Canada. One of the great things they did was to provide a group of men who came in as pioneers to build a railroad, and who have left first and second generations of people who are very important in all parts of the Dominion of Canada. By some means or other the Canadian Pacific Railway commanded a loyalty among its employees, which I think was reflected too in the case of the Canadian National Railways probably under the chairmanship of the late Sir Henry Thornton, when the national system was broughl together in the twenties; and out of that loyalty to their firms there have been given to Canada a great many men who have made great contributions in business-yes, and in this House of Commons as well-because we have had in the past a great number of men in this house, including one or two at present, who have come from the railways, and they have been outstanding citizens.
Passenger traffic today is being lost to the bus lines, and the expensive rear-end traffic of the railways today, over long distances at least, is largely being carried by the aeroplane; and we can expect an increase in that. At the present time we are carrying some 1,400 passengers a day out of our great airport at Vancouver. That is about four trainloads of passengers. That traffic will increase in the future rather than decrease.
Some parts of this bill are of very great concern to Canada, and are outstandingly good. One of them is the $7 million provision. For generations we in Canada have regarded this country as an east and a west with a great gulf fixed between. If this provision to take care of that so-called desert, or non-productive area around the head of the lakes, does nothing more than make the Canadian people realize that we are one country and we are bridging that gap, it will be money extremely well spent.
In the bill there is a definition of eastern territory and western territory. The eastern territory is beyond a line drawn from Armstrong, Ontario to Port Arthur. That provides for shipment from the eastern territory into the intermediate territory by transcontinental roads to all the vast productive area of Ontario and Quebec and such productive areas as we have in the maritimes; and we in British Columbia draw steel products from the maritimes as well. In the case of the western territory, it is defined as a very narrow strip along the Pacific coast. As a matter of fact it is from Mission City to

Vancouver, which is a twenty-eight mile strip. I thought that was hardly fair, and I do not see why we cannot expand the western area or, in other words, bring it in farther from our coast. If possible I would like to see it include the area in which the fruit industry of British Columbia is located. We have not an extensive agricultural industry in that province, but we have a very specialized one. The most important feature, and the most important product of our agriculture there, is the very magnificent grade of fruit produced by the fruitgrowing industry of British Columbia, a product which finds a market in all the provinces of Canada. It is more of a tribute to our fruit than to the Canadian freight rate structure that last year several cars were shipped to Newfoundland at freight rates of $1,700 to $1,800 per car. We will go into that point as we proceed with the discussion.
I noticed in the Vancouver paper that the hon. member for Kootenay East and I had joined with the hon. member for Vancouver-Quadra in a battle in committee, and that we had lost. The hon. member for Kootenay East and myself will have to be more careful of our allies in the future. I am going to say this, that I do join with him in my concern with respect to the transcontinental competitive rates. That is a matter in connection with which there is considerable history in our province. It did not start with the building of the Panama canal. As a matter of fact those transcontinental competitive water-compelled rates were in effect long before the Panama canal was thought of. And as a matter of fact there was movement by way of the Horn which really had an effect upon the very earliest freight rates established continent-wide. That competitive position, so far as transcontinental rates are concerned, is very important to us. It is a very low rate on many commodities, but it is a rate upon which provision is made for shipment to the intermediate territory in Canada.
In order to relieve the disabilities that have come upon the prairie provinces in the matter of freight rates, this bill establishes the provision that upon shipments from either the eastern or western territory into the intermediate territory, the rate to no point shall be greater than one and one-third times the transcontinental rate. That is a matter of very great concern to the central provinces and will bring them a tremendous measure of relief, for which I think the people in all other parts of Canada will be very happy indeed. But I do point this out, lhat to bring
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them that relief it simply has to operate and it can only operate on the basis of the maintenance of our transcontinental rates.
I wish to thank the committee for giving me so much time to discuss the matter at this stage. I enjoyed working on the committee. It is an engrossing subject, which one would have to study many years before he could say that he had any considerable knowledge with respect to it. It is a dynamic problem, and we are dealing with it in a dynamic country. The greatest mistake we could possibly make at this time would be to think that by writing a bill like this we are going to solve the disputes in respect of freight rates for all time. I think we should disabuse our minds of that right now, because we will find that within four or five years this country will be faced with a brand new set of conditions which will make many of the present conditions connected with freight rates entirely outmoded. We can expect that.
One of those factors, I will say, is going to be the industrialization of the west, something that is on our doorstep right now. It is affecting Alberta and British Columbia today, and there is no doubt that this industrialization wil move into Saskatchewan, too. Much of that movement will be westbound, toward the water.


Gordon Knapman Fraser: Not while they have a C.C.F. government there.


Major James William Coldwell: That is a silly remark.


Gordon Knapman Fraser: No, it is not.


Mr. Sinnott:: Let them fight it out.


Arthur Laing: I believe we will have that industrialization, and I trust the people of Canada, when they have profitable industrialization, will also have a government of their choice. I think they will probably have the right government, when they have that industrialization.
We must keep the thought clearly in our minds that we are going to continue to make changes as we go along. There is one further point concerning which I disagree with the hon. member for Vancouver-Quadra and his followers. I refer to the provision discussed this afternoon, to increase the salaries of the commissioners. I thought the hon. member and his followers took a very backward stand. What are the salaries of the high officers of the two railways today? I take it they are probably two or three times the amount the hon. member for Vancouver-Quadra would want to pay these commissioners, who are charged with the responsibility of administering the conditions under

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which both railways operate. I do not think there is any direct relationship between what you pay a man in a particular category and what you get out of him in service. If there were a direct relationship, then I know many public servants of this government, men of outstanding merit, whom we would not have retained as long as we have.
At the same time there is some relationship and certainly there is some connection between the salaries we pay and the services we should expect to obtain from the men we hire. The salaries which will be adopted in this bill are remarkably low when we consider what we should expect from the men who are going to form the board of transport commissioners for Canada. The hon. member for Cape Breton South said this afternoon that they have an important task. I do not think there is a more important commission in Canada because, as he said-and said very well-not only are they administering the conditions under which the roads operate, but they have much to do with determining the economic growth and development of the country. We are going to have to depend more and more upon that commission. I would suggest to the minister that as we go along in developing this policy, he also always bear in mind that we want the strongest and best commission we can possibly have, at all times. We want the most energetic and the best informed. And -and this may be more important than even the commissioners themselves-they should have assistants in the engineering branch, and in the branch of accountancy, equal in all respects to those of the railways. We should be prepared to employ these men, and to pay whatever salaries are necessary to get men as competent as those of the public utilities appearing before them.


Mr. Argue:: Mr. Chairman, I have only a few remarks I should like to make at this point. I have listened with a great deal of interest to hon. members preceding me. I listened to the hon. member for Vaneouver-Quadra. His interpretation of the value of this bill is not the same as mine. If I remember correctly he said that in this bill there is no broad, new, general freight rates policy for Canada. I believe there is a new freight rates policy for Canada spelled out in this bill, in section 332A. That feature of the bill is something for which the people of western Canada have been battling for many years. It is perfectly true that this bill does not provide for the equalization of freight rates by legislation, but it does make the equalization of freight rates, with certain exceptions, the declared national freight rates policy. I
[Mr. Laing.l
believe that declared national freight rates policy will strengthen the stand of the provinces when they appear before the board of transport commissioners from time to time in an effort to obtain a fairer freight rates structure.
The work of obtaining a better freight rates policy will begin with the passage of this bill. This measure does not in itself guarantee in any way the equalization of freight rates; it does not guarantee a better deal for western Canada, but it has in it all the possibilities of a better deal. It will now be up to the board of transport commissioners to see that the terms of this bill are put into effect and that the people in the various provinces get the new freight rates deal for which they have hoped.
When the matter of an increase in the salaries of the transport commissioners was brought up in committee I stated, on the basis of an answer which I had received from the minister that the total of the increases would amount to only $9,000, that I did not feel I could oppose such an increase if it would be effective in strengthening the board of transport commissioners. If there is one thing the report of the royal commission emphasizes repeatedly it is the many ways the present board of transport commissioners has fallen down in dealing with the freight rates question. If a total increase of $9,000 divided among the members of the board of transport commissioners will be successful in bringing about a fairer freight rates structure resulting in large savings to the people of western Canada, perhaps amounting to millions of dollars, I cannot but support those increases.
I hope the minister will obtain the best possible men as commissioners. I have discussed the personnel of the present board with some people who I believe have some idea of its competence, and was informed that one member of the board was in the habit of going to sleep through much of the freight rates hearings. I suppose if a member of parliament goes to sleep too often in the House of Commons his constituents will take care of him at a general election, but I do not think there is room for a member of the board of transport commissioners who goes to sleep. It is time the government obtained the best possible personnel.
We have agreed to the minister's request that increases in salaries be granted, but I tell the minister that as far as I am concerned I will object to those increases if the board does not come through with the goods in a short time. We want equalization of freight rates; we want fairer freight rates, and we are willing to pay good salaries to

the members of the board in order that this be done. But once we have agreed that good salaries shall be paid we want to see action on this new legislation within a short period of time.
One other valuable feature of the bill in my opinion is contained in section 331, which gives the board the power of policing competitive rates. One of the most serious objections counsel for the prairie provinces have taken in the past has been that there was very little or no policing of competitive rates and that finally you had a system of competitive rates in central Canada which because they were so low resulted in excessively high freight rates on the prairies, in British Columbia and perhaps in the maritimes. We support section 331 which gives the board of transport commissioners the power to go into competitive rates, to require the railroads to name the competing carriers, to show the route over which the competing carriers operate, to show the rates charged and so on.
I was not at all impressed with the evidence given before the committee by counsel for the Canadian Pacific Railway. He told the committee the C.P.R. had no idea who were its competitors or what they were charging. He said the C.P.R. had no idea of the amount of traffic its competitors were carrying, and that it would be absolutely impossible to produce the kind of information asked for in section 331. It is true that the board may decide in its own discretion whether this information should be produced, but this section will enable the board to get from the C.P.R. information which the C.P.R. now says it cannot produce. I believe that if the board of transport commissioners does a good job, under the powers granted by section 331, the C.P.R. and the C.N.R. will be obliged to produce the necessary information about competitive rates. If we are to have equalized freight rates in western Canada without an excessively high freight rates structure the board of transport commissioners will have to do a great deal of policing of competitive rates. It is our hope that the board will carry out its duties under this section.
I should like to refer now to section 18, the subsidy section. Hon. members are well aware that provision is being made for the payment of up to $7 million from the federal treasury for the maintenance of the trackage in the bridge across northern Ontario between Fort William and Sudbury on the C.P.R. I believe that as the new section is drafted the western provinces will derive some real
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benefit if the board of transport commissioners carry out the purport of that section, which reads:
(5)The amounts paid under subsection one shall be applied to a reduction in the relative level of rates applying on freight traffic moving in both directions between points in eastern Canada and points in western Canada over the trackage to which the payment relates, in such manner as the board may allow or direct.
As I understand it, this section provides that the $7 million shall be passed on to the shippers by lowering freight rates on traffic going over the bridge.
As I have already said, in my opinion the most important section in the bill is the one on equalization. I, like other hon. members, am no expert on freight rates, but it is my opinion that equalization could be brought about without the $7 million subsidy. Therefore I say that the $7 million subsidy should be used to reduce further the new freight rates for western Canada on long haul traffic. Representatives of the C.P.R. and C.N.R. were questioned, and they felt there was no difficulty confronting the railways in filing rates to bring about equalization. Equalization can be brought about, but when it is established the $7 million should be used to bring about a reduction in rates affecting traffic into and out of the prairie region.
I am glad the bill was amended in the committee to provide that the maritime arbitraries will still be maintained. I know the maritimes have been greatly concerned lest this legislation should affect them adversely. I feel there is ample protection in the bill now for legitimate maritime interests. The maritime provinces have the Maritime Freight Rates Act providing them with a definite reduction in freight rates. My hope is that the $7 million may be used to lower freight rates for people residing in the prairie provinces in the same way that the subsidy now paid under the Maritime Freight Rates Act reduces freight rates for the maritime provinces.
I believe this is a good bill, and I shall be glad to support it; but the main job will have to be done after the legislation is passed. It will be a job for the board of transport commissioners. The railway representatives have said that equalization can be brought about in five years. I would hope it could be brought about in a shorter time, but as far as I am concerned five years should be the maximum time parliament should give the board of transport commissioners to bring equalization into full effect. In a few weeks or less the board will have an opportunity of bringing in new freight rates that I hope will represent a step towards making this legislation effective.

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Mr. Johnston:: I am somewhat at a loss in starting to speak on this bill on this occasion because those of our Conservative friends who were members of the committee were so mild in their criticism today that I am beginning to be a little bit suspicious. I recall quite well the vehemence they displayed in the committee. Then I think of the chief representative of the Conservative party on that committee, the hon. member for Vancouver-Quadra, and I remember that even in the house he is one of those silver tongued orators who could almost cut your throat-figuratively speaking, of course- while he is patting you on the back. I guess he has fallen into that practice because he is a lawyer but I would caution the committee not to put too much faith in the mild attitude he adopted in his first few words on the bill today.
I agree with some of the remarks of the hon. member for Vancouver South. He pointed out that the railways have a difficult problem. We all recognize that. There is not a member of this house or a province of Canada who does not agree that the railways will have to have sufficient revenue to maintain them in a solvent position, and that we need the railways for long hauls and probably will always need them. But the thing about which we in Alberta are concerned particularly-and Alberta is possibly more concerned than any other province over the passage of the bill-is that when the railways want increased revenue they should not get it all from Alberta. That is what we are concerned with, and that is the very point on which I want to caution the representatives of the Conservative party who were on that committee.
They say: "Oh yes, it is all right to have equalization as long as you do not affect us in British Columbia. If the railways need increased revenues let them get them from the province of Alberta. We do not care; that is what has been done all through the years." They say that despite all the handicaps and obstacles Alberta is progressing. Yes, it is; but it is not because of the co-operation of those who are opposing this measure. Certainly we recognize the difficulties confronting the railways, and we want to do our share in seeing that they are maintained in a proper condition. I was interested in the suggestion made by the hon. member for Vancouver South that the western area in British Columbia should be extended farther eastward than Mission. I do not object to that. I was glad he made that remark, but why stop at the British Columbia line? We would like to extend

that area into Alberta. We would like to push it on into Saskatchewan.


Mr. Bryce:: Don't forget Manitoba.


Charles Edward Johnston: Yes, Manitoba too. We would like it so well that we would go further and say that the one and one-third rule should not apply. It should be a parity rule. I wonder if the hon. member would agree with that. We do not want to have to pay one and one-third of the transcontinental rates. We think we should have parity. Why should the people of Alberta pay one-third more than the people of Vancouver, British Columbia? The reason is that we recognize the difficulty of the C.P.R. and the C.N.R., and we are willing to co-operate. We are willing to compromise and be soaked another one-third. The British Columbia Conservative members are not agreeable to that. They want us to take all the load. I refer to the Conservative members as a whole because I do not want to be personal about the thing and I do not intend to be, but the members of the Conservative party who were on that committee-


Mr. Ferguson:: Speak for yourself. Don't try to be a mind reader.


Howard Charles Green: May I ask the hon. member a question? Were there any Conservative members from British Columbia on that committee other than myself?


Charles Edward Johnston: I do not know about other Conservative members from British Columbia, but there were other Conservative members on the committee.


Julian Harcourt Ferguson: If you could read my mind you would sit down.


Charles Edward Johnston: What did the hon. member say?


Julian Harcourt Ferguson: I said if you could read what is in my mind you would sit down.


Charles Edward Johnston: I sympathize with the hon. member for Simcoe North because he has to back up some of the remarks made by his associates before that committee. He really does have my sympathy.


Julian Harcourt Ferguson: I am against your remarks voluntarily. I do not have to be.


Charles Edward Johnston: As long as your remarks are all involuntary it will be all right.


Julian Harcourt Ferguson: Well, read my mind and sit down.


Charles Edward Johnston: Railway Act
Then there is the final conclusion:
This is all that can usefully be recommended in regard to this much debated question of transcontinental rates and their relation to rates at intermediate points.
The royal commission has gone to so much trouble to investigate this problem, and has come to the conclusion that settling these transcontinental rates at one and one-third should be the proper solution in view of the fact that it will assist all the provinces east of the Pacific coast. The maritimes have a problem. I quite appreciate the maritime position in this respect, and we go along with them in stating that their difficulties should be solved. We agree that they should maintain maritime freight rates, and in the committee the legislation was amended in order to ensure that there shall be no interference with their preferred position in the rate structure.
The big question facing western Canada is, are we going to continue to be a mere market for British Columbia, Ontario and Quebec or are we going to be allowed to industrialize our province in the manner in which it can and should be developed? Or are we to be allowed to industrialize our province in the manner in which we can and should develop it? Surely no one would say, when we speak from a national point of view-and that is the point of view we should have in this parliament-that any part of Canada should be retarded in its industrial progress. Certainly no province should stand up in this House of Commons and claim that any part of Canada, no matter where it be, should be retarded in its industrial growth just in order to give an unfair advantage to some other section of the country. No one can criticize us in Alberta for ever saying that we would not carry our full share of any costs which were involved in helping Canada as a whole. When we rise in this House of Commons and declare that we are entitled to justice, no one should criticize us. I would point out that this bill does not do away with the gross and unjust discrimination that has existed for the province of Alberta for the last forty years. No, it does not do that, and let no one get that idea into his head. Even under this bill we in the province of Alberta are paying one-third higher rates than any other part of Canada, at least any part on the transcontinental line. No, Mr. Chairman, we are not getting anything for nothing. Yet some hon. members have the audacity to stand up here and say: You should wipe out the one and one-third rule. Would they not make a great national party?


Alfred Johnson Brooks: Mr. Chairman, I feel that I should rise on a point of order. I was on

this committee. The hon. member has stated a number of times that the Conservative party members on that committee voted with British Columbia as opposed to Alberta.


Charles Edward Johnston: I did not say anything about your vote.


Alfred Johnson Brooks: You said that we opposed Alberta. You said that time and time again.


Charles Edward Johnston: Yes, certainly.


Alfred Johnson Brooks: I want to say that I did not oppose Alberta. I opposed it neither by voice nor vote. I may say that my sympathies were more with Alberta than with British Columbia in this matter. My opinion is that my hon. friend is simply trying to run the Calgary by-election here in this chamber tonight.


Charles Edward Johnston: Now we are getting into elections, Mr. Chairman.


Alfred Johnson Brooks: Yes. That is exactly what you have been doing.


James MacKerras Macdonnell: We have been there for some time.


Charles Edward Johnston: May I point out, Mr. Chairman, that I have not been out to Calgary; but the leader of the opposition was out there and took part in the election campaign, as well as some other members.


An hon. Member:: You are taking part here.


Charles Edward Johnston: I recall what I would call some political speeches before the leader of the opposition went west. I can tell you quite candidly, Mr. Chairman, that I am not thinking of any by-election in Calgary.


Some hon. Members:: Oh, oh.


Charles Edward Johnston: What is one member here or there, compared with the passage of this measure?


Alfred Johnson Brooks: Let the hon. member stick to the facts when he is making statements.


Charles Edward Johnston: Why did you not rise in the committee and give your approval to this section when your colleagues were lambasting it right and left?


Alfred Johnson Brooks: There was not much chance for me to do that, as you were talking most of the time.


Charles Edward Johnston: I am not going to argue about that. I think .1 had a right to talk, because it was Alberta's interests that were at stake.


Alfred Johnson Brooks: Exactly.

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Charles Edward Johnston: I might point out that mari- Mr. Johnston: Manitoba to a degree. But time interests were at stake as well, and I would point out that they are not so out-Alberta voted to assist the maritime provinces spoken in this regard as my friend the hon. in retaining their freight rate structure. member for Vancouver-Quadra.


Alfred Johnson Brooks: We greatly appreciated that fact. So did British Columbia, Saskatchewan and every other province in Canada.


Mr. Fair:: Kiss and make up.


Charles Edward Johnston: They went on to argue that we should not insert in this bill anything about the one and one-third rule. That was not what we were arguing at all. I wonder if you will vote-I hope you will and I think you should-when this bill comes up to support section 332B, which gives us the one and one-third rule.


Alfred Johnson Brooks: Wait and see before you condemn us.


Charles Edward Johnston: I hope you do not get kicked out of the party when you do that.
No, Mr. Chairman, this is no laughing matter to us. We have had to make a great fight in the province of Alberta to get any advance in our industrial progress. We have only been able to do it through mighty hard work in the last several years. Now we want to take advantage of this provision; and as far as we are concerned, we are not going to let anybody stand in our road. We intend to get at least a little bit of relief from this unjust discrimination that we have had to put up with so long. It makes me angry, Mr. Chairman, to have people get up in this chamber and say: "You do not want to take this thing too seriously, because it is only a few items that it affects anyway; this one and one-third rule affects only ten or fifteen items which concern you. You fellows in Alberta had better be careful or you will be worse off than you ever were before". When I hear that sort of thing coming from certain sources I take it with a grain of salt because we are still in the difficulty that we have been in for the last forty years. It is an amazing thing when you have people get up and tell you that in this chamber, when the royal commission found that this gross and unjust discrimination existed and brought in recommendations to relieve it to some extent. The government has brought down a bill which will to a degree relieve it. The Canadian National Railways say this bill in principle is good. There is no difficulty in applying the principles involved in the legislation. The only two who are objecting to it are British Columbia and the C.P.R. railway.


Howard Charles Green: And Manitoba.


Julian Harcourt Ferguson: I thought you said the Conservative party objected to it. Now you have changed your mind. You are forgiven.


Charles Edward Johnston: No. Do not make any mistake about it. I have not changed my mind about the Conservative party.


Julian Harcourt Ferguson: We forgive you. You have apologized.


Charles Edward Johnston: I have not changed my mind.


Julian Harcourt Ferguson: Do not apologize any more. You are forgiven. You made a mistake. We all make mistakes.


Charles Edward Johnston: We will be able to count the noses when the vote is taken.


An hon. Member:: Keep on talking.


Charles Edward Johnston: The point is that this is no joke for us, Mr. Chairman. It is a matter of our existence, of our prosperity. We want to compliment the government again for taking this forward step. It is the only one that I can recall they have taken, but I think they deserve praise in this one instance. I can assure them that we agree with the principles of the bill. We are going to support it in its entirety, although we want it clearly understood that this does not remove the discrimination. It lessens it, however. It does not bring equality in freight rates throughout Canada.
It is an amazing thing, Mr. Chairman, to hear these people talk about removing this one and one-third rule because it is going to injure them a little bit. In the United States the intermediate points have the same rates as does their coast. Yet we in Alberta, even if this bill is passed, will have to pay one-third more. There is a reason why in the central United States you have industrial growth and expansion far beyond that which we have in Canada; and that is the reason. From a national point of view I think these Conservatives-should I call them that?- should have a broader and more national outlook on this bill and should support it so that it may pass this house unanimously.


Mr. Harkness:: Mr. Chairman, I must thank the hon. gentlemen immediately on my right; it is seldom that I have heard them applaud when I rise to speak. I had not intended to take any part in this debate at this time, but somehow I think the remarks just made by the hon. member for Bow River make it necessary that I should say a word or two. The hon. member has sought to convey the

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totally false impression that the Conservative party is opposed to equalization and has been opposed to Alberta getting a better deal in regard to these transcontinental rates and the additional amount which can be charged to Alberta. To illustrate that this impression sought to be conveyed is absolutely wrong all we need do is go back to the debate on the motion for second reading. I think I was the only one at that time who spent the entire time he spoke in connection with this matter of the transcontinental rate and -the proposal in this bill to allow only one-third more than that -as the rate to intermediate points. I would say further that during -the last seven years the former member for Calgary West, Mr. A. L. Smith, and I spoke more frequently in this house in connection with doing away with the discrimination as far as Alberta is concerned in connection with freight rates than any other hon. member.
When the hon. member for Bow River was speaking on second reading did he put on the great blast that he has tonight in connection with -this matter of equalization? No; practically his entire speech was given over to truck competition and matters of that kind. He barely mentioned this matter. He has suddenly come out as a great champion of it -and, as I say, in doing so is attempting to convey the impression that members of the Conservative party are against this; whereas the actual truth, as I have indicated, is that we have more consistently spoken in favour of doing away with this inequity as far as Alberta is concerned than anybody else.
In order to demonstrate just the situation as far as -second reading was concerned I will read what I said at that time in connection with -this very matter. My remarks are found at page 513 of Hansard. I will not read all my speech, but just one section.


Some hon. Members:: Hear, hear.


Douglas Scott Harkness: I thought that hon. gentlemen to my right would -be very much reassured if I made that statement first.


Mr. Stick:: Hear, hear.


Douglas Scott Harkness: 
Some hon. Members:: He knows that.


Douglas Scott Harkness: Why the hon. member should attempt to convey that impression I do not know. It was suggested by the hon. member for Royal that the by-election now pending in Calgary West may have something to do with it. That may be so, but personally I do not think the place to fight by-elections is in the House of Commons. I am sorry the hon. member has made the statements he has and has taken the line of argument he has because what I have said demonstrates quite well that there is no foundation for a contention -of that kind.


Charles Edward Johnston: As I indicated in the committee a moment ago when I was speaking, I do not take this question lightly. It is a question that is of great importance to Alberta. I am going to suggest to the hon. member for Calgary East that if he is so concerned-and I am not saying that he is not-his proper place was -on that committee. If you look up the records you will find that there were some Conservative members on that committee whose attendance was not very regular. There is no more important place for a member who is vitally interested in this question than on the committee that is dealing with it; because there are occasions when a section such as 332B -could be wiped out in a vote and never come to this house at all. The committee is the place where the work is done, not speaking here a month ago, six weeks ago or two weeks ago, so that he goes on the record and out in the press as one who is a great supporter of a certain section which will help Alberta.


Julian Harcourt Ferguson: To hear you talk you would think it is all done there. If all the work is done in the committee why didn't you stay there?


Charles Edward Johnston: I accept the remarks made by the hon. member for Royal. I am going to say that if a vote is taken on this section I think the hon. member for Royal will support it. I may be wrong in that. I am not so sure about the others. We will have to wait and see.


Alfred Johnson Brooks: They do not all have to get up and say it now.


Charles Edward Johnston: Some of the hon. members who are voicing their opinions now were not on that committee. Hon. members should have seen the tenacity with which some of those who were opposed to this section hung on to every little thing to try to discourage the committee from passing it. I know it is the business of a lawyer to hang on to those points until he gets everyone so thoroughly disgusted that they say: "Oh, well, I guess we had better let it go." This is a serious problem for Alberta, and we do not intend to take it lightly.


Douglas Scott Harkness: The hon. member for Bow River now seems to have changed his attack a little. He is now attacking me because I was not on the railway committee. In answer to that I should like to say that I believe I have been on as many committees as any hon. member of the House of Commons during the last five or six years. I am generally on about nine each year of one sort or another, standing and special. It happens also that this year I am on the combines committee. A man cannot serve on both committees satisfactorily, particularly when they meet at the same time. The hon. member's former attack was completely unwarranted. His present attack on the basis that I was not on this committee is even more unwarranted.


Julian Harcourt Ferguson: And ridiculous.


Mr. Poulioi:: Can I act as as a peacemaker, Mr. Chairman?


Stanley Howard Knowles: No man is better fitted for the job.


Jean-François Pouliot: I will say to both hon. gentlemen who have just spoken that they are among the finest members of parliament, although each does not think the same about the other. But it is true nevertheless.


James MacKerras Macdonnell: What does all that mean?


Mr. Churchill:: In view of the remarks that have been made in connection with Manitoba and the Conservatives, perhaps I might say a word or two-


Jean-François Pouliot: If I may be permitted on a question of privilege to say just a word, I said that of two hon. members; I do not promise to say it of a third one.
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Gordon Minto Churchill: I would like to assure the hon. member that everything I am going to say now follows exactly along the line that he has suggested to us. The first is that we maintain a proper sense of proportion, and that we do not get into a violent argument as between western provinces. We have other enemies to fight. I think our position could be put quite clearly. However, I would like to say this before I come to the particular point raised by the hon. member for Bow River. I appreciate very much the importance of the railway committee. I think that has been my most valuable experience here this fall; and I agree with everything that has been said as to the importance of the freight rates structure, and the need for an understanding of it. I agree with hon. members who paid tribute to the royal commission. In my view it performed a most valuable function and has enlightened all Canada with regard to these important freight rates.
The effect of the bill is only that of partial equalization. We must recognize the fact that we had pointed out to us that 41-1 per cent of the railway freight traffic is concerned with matters not affected by this bill at all. Therefore equalization is not over the entire system. Nevertheless the measure of equalization contained within the bill is most agreeable to Manitoba, something that province has been after for years. It meets with the approval of Manitoba. I will say that my opposition in committee was directed only to section 332B, and was based upon representations made by the Manitoba government- and it is not a Conservative government.
I represented in the committee the views of the Manitoba government that were brought to our attention by the representatives who appeared before the committee. I believe their point was fairly well taken. We have heard the statement tonight that Alberta's interest is at stake. Well, Manitoba's interest is at stake; and it is only right that each representative should speak for his own province. Perhaps, as in some other instances, the solution would be by way of compromise. That is all that was suggested in the representations from Manitoba, namely some modification of this particular section. When it comes up for discussion we can deal with it in more detail.
That is all this great fight is about; and it seemed to me it was magnified tonight by the remarks of the hon. member for Bow River. Surely it is only right and proper for provincial representatives to emphasize the stand taken by their respective provinces. We may not win our point. Perhaps the solution offered in the bill is the one which will be

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adopted. All we are saying is that if that is adopted, then for a long period of time there will be complaints from other provinces. Complaints that are now being satisfied in respect of one province will be replaced by those of another province. I think a more moderate solution to this problem could have been devised. I have sympathy with the problem in Alberta. I am not blind at all to the difficulties under which they have been labouring.
Then, with regard to the salaries of the commissioners, the suggestion was thrown out that we opposed the increase because we are generally dissatisfied with the bill, and things of that nature. Well, it struck me as rather odd that in this House of Commons, where on some occasions it is so difficult to get support for people who are in actual need, we can quite easily and quickly hand out thousands of dollars to people who are not in any particular economic distress. I was not impressed by the argument that another two or three thousand dollars given to certain individuals would result in better work on the part of the board, or would necessarily result in obtaining more valuable people later on. Surely there are people in Canada who, as a public service, will accept positions on boards as important as this without necessarily worrying as to whether the salary is $10,000, $12,000 or $25,000.
Generally I approve of the bill. My opposition to it will be expressed chiefly with regard to section 332B, and I shall reserve my right to have something to say when that section is before us. I do, however, reject the suggestion that there is afoot a campaign to do harm to Alberta. On the contrary, I suggest that so far as Manitoba is concerned some better solution for this problem is desirable. It could very well be a compromise, and could be achieved in a peaceful manner.


Howard Charles Green: Will the minister explain the provision for the chief commissioner? I refer particularly to the terms of the bill which make him a supernumerary judge of the exchequer court upon his retirement. As I read the Railway Act, as it stood before the introduction of Bill No. 12, the provision with respect to the exchequer court was almost the opposite of the provision in the new bill. That is, it dealt with the case of a judge of the exchequer court becoming chief commissioner, and not losing his rights as an exchequer court judge by reason of the transfer.
I may be wrong in that, because there are only certain sections of the Railway Act appearing in Bill No. 12. It would appear to me, however, that the approach in the present

instance is just the opposite, in that the chairman can be brought in from the outside and then, after he resigns or is retired, he automatically goes to the exchequer court, whether that court requires judges or not. He continues to receive the salary of an exchequer court judge until he reaches the age of 75 years. Am I right in my contention that there is an entirely different approach under the bill?


Lionel Chevrier: No, there is not an entirely different approach, because the former chief commissioner also held the position of judge of the exchequer court. He was first appointed judge of the exchequer court, anc( thereafter became chief commissioner.
In this instance subsection 2 of the amendment clearly sets out that the salary of the chief commissioner will be paid, under the Judges Act, from the appropriation the Minister of Justice brings down. He will be paid as a puisne judge of the exchequer court, and for all purposes he will be a puisne judge of the exchequer court. But the difference between his salary as chief commissioner and his salary as a puisne judge will be paid through the appropriation of the Department of Transport. I would draw to the attention of the hon. member the fact that the former chief commissioner held both positions, just as the present chief commissioner holds both positions.


Howard Charles Green: The minister is referring to Mr. Justice Archibald?


Lionel Chevrier: Yes. All subsection 2 does is clarify the position. It is not a new approach. Both the former chief commissioner and the present chief commissioner were chief commissioner and puisne judges of the exchequer court at the same time.


Howard Charles Green: Is Mr. Justice Archibald now
a judge of the exchequer court?


Lionel Chevrier: He has resigned as chief commissioner and is now a judge of the exchequer court.


Howard Charles Green: Could we be in the position of there being several former chief commissioners of the board of transport commissioners all of whom would be entitled under this legislation to be judges of the exchequer court?


Lionel Chevrier: No, there can be only one chief commissioner of the board of transport commissioners.


Howard Charles Green: If the present chief commissioner resigns in five years he will automatically become a judge of the exchequer court and remain as such until he reaches the age of 75 years. His successor could do

the same. As I read the proposed amendment, when a chief commissioner retires he automatically becomes a puisne judge of the exchequer court.


Lionel Chevrier: That is right.


Howard Charles Green: And continues as such until he reaches the age of 75 years.


Lionel Chevrier: That is the position.


Howard Charles Green: Why is it necessary to have a provision of that kind? Why could they not be covered by a pension scheme? Why do they automatically go to the court?


Lionel Chevrier: This does not change the position that prevailed heretofore. It simply makes the present incumbent's position the same as that of his predecessor; he is chief commissioner at the same time he is a puisne judge.


Howard Charles Green: Could the minister give the salaries of other officials who come under his jurisdiction? I would like to know the salary of the deputy minister of transport; the salary of the members of the Canadian maritime commission; and of the members of the air transport board.


Lionel Chevrier: The salary of the deputy minister is $13,500; the salary of members of the maritime commission is $10,000; I think the chairman of the air transport board receives $12,000, while the members receive $8,000.


Howard Charles Green: The figures I have are $12,000 for the chairman of the air transport board and $9,000 for the members.


Lionel Chevrier: Perhaps there was an
increase from $8,000 to $9,000.


Howard Charles Green: I have the chairman of the maritime commission receiving $12,000, with the ordinary members receiving $10,000. I have figures indicating that the chairman of the Canadian pension commission under the Department of Veterans Affairs receives $12,000 and his deputy $10,000, with the ordinary members of the commission receiving $9,000. In the case of the war veterans allowance board, the chairman receives only $9,000 while the ordinary members are paid $7,500. Vice-presidents of the research council get only $10,000. The chairman of the board of grain commissioners is paid $12,000, while the ordinary members of the board receive $10,000. The amendment brought in by the government today seems to make the salaries to be paid out of line with the salaries paid to other officials holding similar positions. How can we justify differences of that kind?
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Lionel Chevrier: I gave some reasons earlier today why the government was disposed to accept the recommendations of the committee. The first was that the royal commission on administrative services had recommended that members of the board of transport commissioners should receive at least $2,000 more than members of other boards. That explains the discrepancy in the salaries the hon. member has referred to. I indicated also what was said by the royal commission itself. Otherwise there would be a great discrepancy between the salaries paid to members of the board and the salary of the chief commissioner.


Stanley Howard Knowles: I believe I heard the minister state that the salary of the deputy minister of transport is $13,500. I have in my hands the estimates for the current year and they indicate that it is $12,000.


Lionel Chevrier: There has been an increase to $13,500.


Stanley Howard Knowles: How does he get a raise without our hearing about it?


Alfred Johnson Brooks: Just before the recess at six o'clock I asked for the dates of the appointment of the commissioners and the dates of retirement. The minister gave a partial answer and I understood him to say that he would give a complete answer later on.


Lionel Chevrier: I could not get it during the recess, but I will give it to the committee when this bill comes up again.


Mr. Follwell:: Provisions of sections 1 and 2 of the bill are to come into effect on the first day of January, 1952, and there would then be a vacancy for the position of puisne judge of the exchequer court.


Lionel Chevrier: No.


Mr. Nowlan:: I think we should have the information asked for by the hon. member for Royal before this section carries, because it certainly goes to the question of whether the board is being strengthened. If members of the board who have been recently appointed or reappointed are going to continue to sit from six to- ten years, without making any comment as to their qualifications as being strong or otherwise it is obvious that we will not be strengthening the board by increasing the salaries. I have not the recommendations of the royal commission before me, but as I remember they recommended or said that the best way to strengthen the board was to extend the tenure of office of the members and make the appointments for life on the basis of good behaviour.
I think the minister referred a moment ago to a vacancy on the board and said that an appointment is to be made. I assume that

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arises from the retirement of Mr. Justice Archibald. That would leave a vacancy in :so far as maritime representation is concerned. I should like the minister to advise when an appointment will be made and if the regional basis of appointment is to be recognized?


Lionel Chevrier: When an appointment is made it will be announced by the government.


Louis-René Beaudoin: Do I understand that, with the exception of subsection 3, section 1 can be considered as carried?


Howard Charles Green: No, nothing is carried yet.


Louis-René Beaudoin: It is now understood that the general discussion under section 1 is completed?


John Horne Blackmore: No, there is no indication that we have finished discussing section 1.


Louis-René Beaudoin: It has been the practice that a general discussion is held on the first section, and for the last few minutes specific questions have been asked. Before we break up I should like to have an understanding that when we open up the discussion again it is understood that the general discussion is over.


John Horne Blackmore: We want it definitely understood that the general discussion is not completed. Certain members got the floor and started to ask questions, which prevented other members continuing the discussion.
Section stands.
Progress reported.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will resume the debate on the address, and we hope to have a vote on the amendment to the amendment moved by the hon. member for Acadia.


James MacKerras Macdonnell: What do we do if it is not finished by the end of the session?


Alphonse Fournier: Pardon?


James MacKerras Macdonnell: What do we do if it is not finished by the end of the session?


Alphonse Fournier: We had plenty of work today. Today is an indication of the work we have.


Lionel Chevrier: When is the end?


Stanley Howard Knowles: How long is a string?


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on November 2, 1951.
[Stage Direction]
Wednesday, November 28, 1951